What Exactly Is a “Riot” and “Civil Commotion” Under a Property Insurance Policy?

Yesterday’s post, Are Damages to Businesses from the Recent Riots and Civil Commotion Covered Under Property Insurance Policies?, established that the property damages and lost income from the current riots are generally covered under commercial insurance policies. While we all can see riots from the television, what is a “riot” and what is a ”civil commotion” in the Insurance context?

Shane Smith wrote an excellent post, Riot or Civil Commotion Coverage, where she explained how these coverages are defined.

A riot is defined by Black’s Law Dictionary as:

1. An assemblage of three or more persons in a public place taking concerted action in a turbulent and disorderly manner for a common purpose (regardless of the lawfulness of that purpose).

2. An unlawful disturbance of the peace by an assemblage of usually three or more persons acting with a common purpose in a violent or tumultuous manner that threatens or terrorizes the public or an institution.

Courts have defined riots differently. For example, it has been defined as ‘the gathering of three or more persons’ with the ‘common purpose’ to do ‘an unlawful act [with the intent to use] force or violence.’¹ It has also been defined as requiring ‘tumult” or disturbance’ at the time of the action.²

A civil commotion is defined as a public uprising by a large number of people who, acting together, cause harm to people or property.³

The Second District Court of Appeal has compared the terms riot and civil commotion:⁴

• The local nature of the perils of ‘riot’ or ‘civil commotion’ imparts occasional local or temporary outbreaks of unlawful violence.

• Riots and civil commotion are purely ‘domestic disturbances.’

• They are ‘essentially a kind of domestic disturbance. . . such as occur among fellow citizens or within the limits of one community.’

• In order for a disturbance to qualify as civil commotion, ‘the agents causing the disorder must gather together and cause a disturbance and tumult.’

A California case, North Bay Schools Insurance Authority v. Industrial Indemnity Company,⁵ had the following finding:

The commonly understood meaning of the term…includes public disturbance or tumult as an essential element. Vandalism, arson or other such acts, destructive as they may be, do not constitute a riot if they are conducted away from public view with the intent they remain unobserved.

The dissenting opinion is worth reading in its entirety because it states how insurance policies should be interpreted to find coverage under California law:

[A]ny ambiguity or uncertainty in an insurance policy is to be resolved against the insurer and … if semantically permissible, the contract will be given such construction as will fairly achieve its object of providing indemnity for the loss to which the insurance relates. The purpose of this canon of construction is to protect the insured’s reasonable expectation of coverage in a situation in which the insurer-draftsman controls the language of the policy. Its effect differs, depending on whether the language to be construed is found in a clause providing coverage or in one limiting coverage. Whereas coverage clauses are interpreted broadly so as to afford the greatest possible protection to the insured, exclusionary clauses are interpreted narrowly against the insurer. [A]n insurer cannot escape its basic duty to insure by means of an exclusionary clause that is unclear. As we have declared time and again, any exception to the performance of the basic underlying obligation must be so stated as clearly to apprise the insured of its effect; thus, the burden rests upon the insurer to phrase exceptions and exclusions in clear and unmistakable language. (Citations omitted)

It further explains arguments for “riot” coverage:

An ambiguity exists when the written language of an instrument is susceptible of two or more interpretations….My colleagues claim neither party argues the term ‘riot’ is ambiguous, and the term as understood by the layman is unambiguous. I totally disagree.

There are as many as 14 definitions of the word ‘riot’ in The Random House Dictionary of the English Language. Although the majority of these definitions are inapplicable to the facts in this case, I find three definitions which provide possible interpretations of the contract language: ‘1. a noisy, violent public disorder caused by a group or crowd of persons, … 2. Law. a disturbance of the public peace by three or more persons acting together in a disrupting and tumultuous manner in carrying out their private purposes. 3. violent or wild disorder or confusion.’ (The Random House Dict., op. cit. supra.) Each of these definitions provides a somewhat different set of circumstances. While two of the definitions require the event to occur in public, the third does not. Thus, the word ‘riot’ is capable of being understood in two or more possible ways and is ambiguous.

Both North Bay and the Insurers rely on Penal Code section 404 to define the word ‘riot,’ although they arrive at different interpretations. However, the mere fact that the Legislature has defined a term for one purpose does not shelter that word from the normal rules of interpretation. Penal Code section 404 defines ‘riot’ for the purpose of criminal law; the statute was not intended for construing insurance contracts. Here, the language is that of the insurer, not of the Legislature, and the normal rules of interpretation apply….

It is for this reason I reject the Insurers’ authorities from other jurisdictions….In each of these cases the court looked to either a state statute or the common law, which defined ‘riot’ for the purpose of criminal law. While the criminal definition of ‘riot” provides a possible interpretation of the disputed term, there are other definitions for “riot’ which do not constitute criminal conduct.

I also question the majority’s position that the definition of ‘riot’ necessarily connotes activity that is done in public and before witnesses, and that it does not include conduct that is surreptitious. The unfortunate events which occurred in Los Angeles in April of this year highlight my concerns. If, for example, two Los Angeles retail stores have the same insurance policy as the one in this case, is only that store which is torched and looted before witnesses covered under the policy? Would any damage caused by an act of vandalism or arson during the three-night period be uncovered?

My view that the term ‘riot’ is ambiguous is further supported by the fact that, according to language in the insurance policy, single losses occurring during a 72–hour period include ‘riot’ and ‘riot attending a strike or civil commotion.’ If the term ‘riot’ was unambiguous, there would be no need for this redundancy. The majority’s distinction between ‘riot’ and ‘riot attending a strike or civil commotion’ is contradicted by the policy. Windstorms, hail, riots and riots attending a strike or civil commotion are all contemplated as prolonged disturbances which may occur for more than 72 hours.

The bottom line is that some insurance companies look for more ways not to pay than for reasons of coverage. While “riots” and “civil commotion” seem to be the cause for many recent damages which should result in coverage, those ingenious insurance company attorneys will often argue the fine print and definitions to prevent commercial policyholders from receiving coverage for events which may not just catch the public eye on television because they were done in non-public area, which just happens to be by a nearby riot or civil commotion. How absurd!

This is wrong and Merlin Law Group is here to help if you are caught with an insurance company not willing to Pay Up!

Thought For The Day

The limitation of riots, moral questions aside, is that they cannot win and their participants know it. Hence, rioting is not revolutionary but reactionary because it invites defeat. It involves an emotional catharsis, but it must be followed by a sense of futility.
—Martin Luther King, Jr.
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¹ Ins. Co. of N. Am. v. Rosenberg, 25 F.2d 635, 636 (2d Cir. 1928).
² Hartford Fire Ins. Co. v. War Eagle Coal Co., 295 F. 663, 665 (4th Cir. 1924).
³ Black’s Law Dictionary (9th ed. 2009).
⁴ 10A Couch on Ins. § 152:6; Pan American World Airways, Inc. v. Aetna Casualty & Surety Co., 505 F.2d 989, 1019-20 (2d Cir. 1974).
⁵ North Bay Schools Ins. Auth. v. Industrial Indem. Co., 6 Cal. App. 4th 1741 (Cal. App. 1992).