Protests on the rise – are you covered?

With public focus on political issues running high, the possibility of protests interrupting your business should be on every retailer and consumer brand's risk management agenda.

How 'high up' these issues feature will depend on the nature of your business and the potential threats you face. Here we take a brief look at the rise of civil protests and the steps which can be taken to mitigate their impact. 

Background

A common theme running through many of the biggest news stories in recent years has been the action taken by protestors to force change, or to publicise their agenda. Protests relating to diverse issues such as inequality, the environmental crisis, covid lockdowns, fuel prices, food shortages, animal rights and the war in Ukraine have affected city centres across the UK. Groups willing to take action for a political motive, such as Extinction Rebellion, have developed new tactics to attract attention to their cause, while experts have predicted the potential for a wider scale of social unrest driven by the cost of living crisis.  

How prepared is your business for protests, and how prepared should it be? 

Some recent examples of protest activity impacting retailers, restauranteurs and consumer brands include: 

• restaurants targeted by Animal Rebellion, which has involved activists choosing the busiest night of the week to occupy tables and hold faux menus detailing the 'environmental costs of food' served at the restaurant, ultimately forcing some restaurants to close for the evening.
  
  
• since March this year, Just Stop Oil protests have taken place across the UK.  Recent action to block the M25 may not have directly impacted retailers "in store", but it meant that supply chains were disrupted, leading to localised empty shelves and failed deliveries. 

Potential Impact

Retailers and consumer brands are seeing costs and disruptions to their businesses for a variety of reasons relating to, or arising out of, protests. Incidents of direct property damage from protests are still rare, but tactics employed by protesters may lead to business interruptions, or changes in the public perception of a company's role in national and global issues. The willingness of protesters to target fuel depots, supply chains and transport infrastructure may have a disproportionate impact on retailers, especially those selling perishable goods.  

Costs arising from protest activity may be covered by insurance (particularly if property damage is involved), but the extent to which they are covered depends on the terms and conditions of the policy. Most standard insurance policies are unlikely to cover disruptions to supply chains or wider business interruption. 

As the cost-of-living crisis escalates, this brings with it the potential for wider scale civil unrest, an increase in shoplifting and even looting or rioting. Previous incidents of social unrest, such as the London riots in 2011, led to questions over whether standard insurance policies covered the subsequent losses. The best way to be sure is to ask insurance brokers and seek clarification from the insurers. 

Risk Management

In light of the increased risks of civil unrest and protests, it is paramount that businesses ensure they have adequate risk assessment procedures in place. For example, is your business involved in something that people may perceive as going against their political agenda? If you are a retailer or consumer brand selling animal products, it is foreseeable that an animal protest could take place at your business and cause interruption. Do you sell perishable goods that will be affected by any disruptions to roads/travel? If so, you may need to consider the impact of delayed deliveries to the quality of your products.

It is imperative to determine the financial resilience of your business and work out where your stress points are. If your business is interrupted, how long can your business survive? The shorter that time period is, the more important it is to ensure you have the right insurance in place.   

The level of damage and business interruption will vary, but where there is a risk there is usually an insurance policy to help. As these issues are unlikely to be covered by a standard insurance policy, you should contact your broker to assist you in obtaining the best policy to meet your business' needs. 

Takeaways 

• Most important: thinking of your company's financial resilience, where could protests cause it stress points?
  
  
• How long could your business be interrupted for and be ok? 
  
  
• Work out crisis management strategies – do you have an appropriate one in place? Do you know what to do if there is a protest at your business?
  
  
• Who would you need to contact if a protest affected your business?  Do you have adequate security arrangements or contacts with local police forces?
  
  
• When would your existing insurance cover step in?
  
  
• If in any doubt talk to your broker; it could be that your business would benefit from a stand-alone policy. Always look at the policy terms and conditions to understand what is covered.

If you have any questions on the contents of this article, please contact Ed Colville or Peter Mansfield. 

Don't forget our insurance covered podcast, looking at the inner workings of the insurance industry, as well as our Retail Compass, which takes you through upcoming legal and policy changes affecting Retail and Consumer Brands