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The Globe and Mail

Insurance may not cover all business losses

When Jennifer Vanderleij opened Clover Earthkind Hair Salon in downtown Vancouver three years ago, she made sure the insurance policy covered losses resulting from such events as breaking and entering and vandalism. But riots? Who needs riot insurance?

Evidently, she did. As downtown businesses struggle to tally - and recover from - the cost of the Stanley Cup riot, none seem to be struggling as much as Clover Earthkind Hair Salon. Online videos show that a mob took newspaper boxes to the salon's windows, and even used a parking lot clearance beam as a battering ram to smash through the dropdown gate. They destroyed the window displays, stole products and wrecked the floor and chairs.

Ms. Vanderleij has been told by her broker that losses resulting from a riot are excluded from her insurance policy. She hopes the company is willing to be flexible, but if not, Ms. Vanderleij will be on the hook for an estimated $5,000 to $10,000 worth of damages.

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"Why would anyone have riot insurance?" she asked on Friday. "You would think not in Vancouver. I just assumed I would be protected, but potentially that's not so."

Even large corporate companies such as London Drugs and Blenz Coffee will have to pay for certain losses out of their own pockets. Blenz Coffee president George Moen said on Friday that each of the three downtown coffee shops (one of which was virtually destroyed) targeted by rioters suffered six-figure damage costs, but not everything was insured.

"We're covered for the replacement of some of our products, but not all," Mr. Moen said. "There are other costs associated with this that are not covered, like the damages of trauma and stress to [our staff]"

To recover some of those losses, Mr. Moen has filed a lawsuit against 150 people who allegedly looted and damaged his shops. Small businesses, on the other hand, have no means to do the same.

Charles Gauthier, executive director of the Downtown Vancouver Business Improvement Association, said on Friday that his organization is working with the city and a third party to establish a relief fund for businesses most in need. A formal announcement will be made within the next few days.

"We know there are businesses in need because they may not be able to rely on their insurance," he said. "There's been an outpouring of emotions - phone calls and e-mails forwarded to me from people who have ideas for fundraisings. There has been discussions over the course of the week on how to get money from donors to those most deserving."

Contemporary Art Gallery executive director Nigel Prince said he had been asked to submit details to the mayor's office about repair costs, and is waiting to hear back about funding help. Otherwise, the non-profit art gallery, which had its windows damaged during the riot, will have to foot the $1,000 bill because insurance won't cover it.

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Without outside help, Ms. Vanderleij isn't sure if her salon can recover.

"We're still [a]relatively new [business] we're under three years old and still paying off business loans, so it will definitely hurt us," she said. "But what are you going to do? I refuse to shut down because it would be just the most horrible thing in the world. I have staff who rely on me and I would hate to think they'd be unemployed and have to look for work."

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