Insurer Warns Businesses of Risk of Increased Civil Unrest

Businesses around the world should prepare for an increase in civil unrest as a cost-of-living crisis follows on the heels of the COVID-19 pandemic, according to Allianz Global Corporate & Specialty (AGCS).

Strikes, riots, and violent protest movements pose risks to companies because, in addition to damage to buildings or assets, business operations can also be severely disrupted by a lack of access to facilities, resulting in loss of income, AGCS said.

"Civil unrest increasingly represents a more critical exposure for many companies than terrorism," Srdjan Todorovic, head of crisis management, UK and Nordics, at AGCS, and, as of July 1, head of global political violence and hostile environment solutions at AGCS, said in a statement.

"Incidences of social unrest are unlikely to abate any time soon, given the aftershocks of COVID-19, the cost-of-living crisis, and the ideological shifts that continue to divide societies around the world. Businesses need to be alert to any suspicious indicators and designate clear pathways for de-escalation and response, which anticipate and avert the potential for personnel to be injured and/or damage to business and personal property."

AGCS noted that social media in conjunction with political polarization is fueling protest movements. Economic and insured losses from previous protests have been significant, creating significant claims for companies and their insurers, the insurer noted.

Targets of civil unrest, or collateral damage resulting from it, could include government buildings, transport infrastructure, supply chains, retail premises, foreign-owned enterprises, gasoline stations, distribution centers for critical goods, and tourism or hospitality businesses, AGCS said.

The insurer suggested that companies review and update their business contingency plans if necessary, considering any supply chain vulnerabilities. They should also review their insurance policies in the event of increases in local civil unrest. AGCS noted that property insurance policies may cover political violence claims in some cases, but insurers offer specialist coverage to mitigate the impact of strikes, riots, and civil commotion (SRCC).