A smash-and-grab burglary at a cannabis dispensary in San Francisco, California, in late September left the business with significant property damage and missing merchandise. According to CBS News Bay Area, the burglars pulled open the dispensary’s metal security gates using a chain attached to the back of their SUV and then rammed the vehicle through the store’s rollup metal door and into its front lobby, before “ransacking” the store and leaving with bags full of products.
It was reportedly the fourth break-in at the dispensary in the last three months alone and the most destructive one to date. A similar crime recently took place at a smoke shop in Colorado Springs, Colorado, which also involved thieves using a vehicle to ram through the storefront, the Colorado Springs Gazette reported. That incident was one of almost three dozen similar smash-and-grabs in the city this year that have mainly targeted smoke and gun shops, according to the newspaper, and it has left many business owners “on edge.”
When a vehicle is used to force entry into a building, the damage is often extremely costly. The entry method frequently involves vehicles barging through walls, resulting in heavy damage and costly repairs.
This type of damage, along with stolen inventory, could be covered under a business’s Commercial Property Insurance — a policy that is essential for all retailers but especially those selling goods that thieves are more likely to target, such as cannabis or electronics.
Recent incidents align with broader trends showing that high-value retail categories remain frequent targets for theft, including tobacco-related products, cannabis, sporting goods and fine arts.
Some areas seeing surge in smash-and-grabs
A series of commercial break-ins have also recently plagued business owners in Chicago, Illinois, where police issued warnings in September about a surge in carjackings and commercial burglaries targeting shops and restaurants in the city, NBC Chicago reported.
According to Pew Research, property crime in the U.S. declined 59% between 1993 and 2022, including a 75% reduction in burglaries. However, certain types of property crimes have been on the rise in specific areas. In California, for example, shoplifting and commercial burglaries increased about 14% in 2023, including much larger increases in some areas, but three counties in the state with some of the highest retail theft rates saw decreases in retail theft last year, according to the Public Policy Institute of California.
In Canada, smash-and-grabs do not appear to be spiking overall, but certain classes of business are at higher risk for these crimes, said Patricia Sheridan, Director, Ontario Commercial Insurance, Burns & Wilcox, Toronto, Ontario. These include cannabis dispensaries and computer and phone retailers. “Those are always more attractive for smash-and-grabs,” she said.
If stock is properly secured, the impact of a burglary might be minimal. If it is a jewelry store where stock is not secured, that could be hundreds of thousands of dollars.
Jewelry stores may also be at higher risk. In Mississauga, Ontario, last month, police responded to a smash-and-grab robbery at a jewelry store, where an undisclosed amount of jewelry was stolen, CTV News reported. The total loss a business faces after this type of incident can vary drastically, Sheridan said.
“If stock is properly secured, the impact of a burglary might be minimal. If it is a jewelry store where stock is not secured, that could be hundreds of thousands of dollars,” she said.
For cannabis retailers, smash-and-grab incidents remain the most common claim in the cannabis industry.
Insurance may exclude some burglary losses
Business owners should know that Commercial Property Insurance policies for retail stores may have restrictions or exclusions regarding crime. High-target theft items may be excluded altogether or have a separate sublimit. It is also common for insurance carriers to require that businesses have a central station burglar alarm to be insured.
If safeguards are not in place at the time of a loss, a claim could be denied and there may be no coverage. In some cases, businesses that carry high-target items may not be able to obtain theft coverage at all.
Crime is often excluded completely or limited to a small sublimit, such as $10,000. In some cases, businesses may need to purchase a separate Crime Insurance policy, which can cover risks such as employee dishonesty.
“Theft is usually covered under broad-form Commercial Property Insurance, but once you get into theft of money and valuable papers, or off-premises risks, all of that is Crime Insurance coverage,” Sheridan said.
Business Interruption coverage on a Commercial Property Insurance policy should also be considered, as significant building damage could shut a business down following a smash-and-grab incident. This coverage is important because businesses may still have ongoing expenses, including payroll and bills.
By working with a knowledgeable insurance broker, business owners can ensure they have adequate limits for property damage or theft related to smash-and-grabs. In the cannabis industry, insurance policies with appropriate coverage limits are necessary risk management tools for all cannabis operators. Without proper insurance, operators may be forced to pay claims themselves, which could severely impact or even close the business.
Mitigating commercial property risks
To help prevent theft claims related to employee dishonesty, businesses can emphasize careful hiring procedures. Many theft claims originate from employees who have knowledge of premises security, enabling them to gain access or share that information with others. Businesses should implement strong hiring practices, including background checks for all potential new hires.
Camera monitoring systems are also key, particularly as businesses increasingly rely on security footage to help identify suspects. In many cases, individuals are identified through recorded footage, reinforcing the importance of having strong protective safeguards in place.
Working with a knowledgeable insurance broker or agent can help ensure that business owners understand their coverage, including any limitations or sublimits related to theft. Clear communication about policy terms can help prevent unexpected gaps in coverage at the time of a claim.
Having protective safeguards in place will also help businesses find insurance coverage, Sheridan added.
“Insurance carriers do not want to offer coverage if the business is not putting any controls in place. Theft can still happen, but that risk is extremely minimized because as soon as someone breaks in, there is that central third-party monitoring company that would respond right away,” she said. “Insurance, in general, is meant to protect your business so that if you suffer a loss, you are not financially impacted. It is always in an insured’s best interests to mitigate their losses as much as possible. Brokers also can help the client by making sure they are getting the proper coverage and suggesting the appropriate measures on mitigation.”
