Recent bizarre incidents in the United States, where raccoons have stolen alcohol and bitten diners, have raised a pressing question for business owners on this side of the Atlantic: would your commercial insurance cover such unexpected animal antics?
The Unlikely Business Disruptors
In recent weeks, two separate raccoon incidents made international headlines. In one, a raccoon fell through a restaurant ceiling in Wisconsin and bit a customer. In another, a raccoon in Virginia raided a liquor store's bottom shelf, became intoxicated, and passed out on a bathroom floor. These events forced the affected businesses to navigate insurance claims for property damage, lost stock, and customer injuries.
Franklin Manchester, principal global insurance advisor at analytics firm SAS, told The Independent that how insurance responds hinges on two critical factors. "The first question I would ask in this scenario is whether the raccoon was indeed a wild animal or the property/pet of someone who could be identified," he explained. This distinction dictates whether a business's commercial policy or a pet owner's personal liability coverage applies.
When the Animal is Truly Wild
If a business suffers inventory loss or a patron is injured by a wild animal, the business is likely liable. In such cases, a claim would typically be filed under its commercial general liability policy.
However, filing a claim is no guarantee of payout. Insurers will investigate, and a major hurdle can be the principle of the "known issue." "If you knew your restaurant vulnerabilities, like gaping holes in a wall or an entry point in your building’s roof that wasn’t supposed to be there, your insurer might deny your claim," Manchester cautioned. An adjuster will look for evidence of how the animal entered and whether there was a pre-existing infestation.
"If it's not an infestation, and if those entry points were secured, and it is indeed a wild animal, then the insurance company may ask ‘Did you know about the raccoon,’ and try to deny the loss under a ‘known issue’ exclusion," he said.
Even with robust preventative measures, coverage gaps remain. Communicable diseases are often excluded from standard policies. "So, if the patron was bitten and contracted rabies, that could be excluded," Manchester noted.
Coverage for Lost Revenue and Pet-Related Incidents
If damage forces a temporary closure, businesses may recoup lost income through business interruption insurance. This can cover revenue shortfalls, ongoing lease payments, and payroll, according to carriers like The Hartford.
The scenario changes if the animal is a pet. "Now if the raccoon is someone's pet... then the liability for the owner's personal policy would come into play," Manchester stated. However, insurers might argue that raccoons are exotic pets, potentially voiding coverage under a standard personal liability policy.
For UK business owners, these unusual cases underscore the importance of understanding policy exclusions, maintaining secure premises, and being aware that not all unexpected events are automatically covered, even by comprehensive commercial insurance.
