Commercial properties left vacant during coronavirus-related shutdowns have increasingly become the target of burglaries, adding another challenge for businesses already facing mounting hardship. Even as overall crime rates have plummeted globally, New York City saw a 169 percent spike in commercial burglaries in April and Vancouver reported a 147 percent increase in commercial break-ins between March 18 and April 15.
Reduced staffing and businesses operating at limited hours mean more opportunities for burglaries.
After his Raleigh, North Carolina bar was burglarized one business owner reported feeling as though he had been kicked while he was already down; in nearby Durham police have seen a 40 percent spike in commercial burglaries since the COVID-19 outbreak began. In Toronto, where a series of break-ins have occurred at businesses deemed non-essential, one business owner described the combination of empty storefronts, workers at home and an inactive judicial system as a “perfect storm” of burglary risk.
“Businesses are facing difficult circumstances as it is,” said Meghan Maher, Manager, Property & Casualty, Burns & Wilcox, Halifax, Nova Scotia. “In communities that have mandated government shutdowns, commercial properties are definitely left more exposed than they would be if staff could be on site every day and customers were coming and going.”
In light of the rising risk of burglaries, which cause billions of dollars in losses each year, many companies are revisiting their Commercial Property Insurance coverage and stepping up security measures. “This is a time when individuals and business owners are taking a much closer look at their insurance policies,” Maher said.
Greater potential for burglaries during long-term business shutdowns presents “an increased hazard,” said John Heaner, Associate Managing Director, Burns & Wilcox, Tampa, Florida. “Reduced staffing and businesses operating at limited hours mean more opportunities for burglaries.”
Unattended properties, unemployment lead to crimes of opportunity
Commercial break-ins have spiked across the U.S. and Canada since coronavirus shutdowns began. Commercial burglaries are up 42 percent in Columbus, Ohio, 28 percent in Tacoma, Washington, and 25 percent in Philadelphia, where retail thefts have also spiked 36 percent. In Eureka, California, burglaries rose by 30 percent between mid-March and April 28, and Windsor, Ontario recently reported a rise in break-ins at car dealerships.
The increase is not necessarily a surprise, Maher said. “Due to social distancing, and Canada’s prime minister encouraging everyone who can work from home to do so, commercial property owners simply cannot access or watch over their premises like they would have three months ago.”
In addition, burglaries tend to spike during periods of economic turmoil. Research has shown that historically there has been a correlation between the unemployment rate and criminal activity.
“Whenever you have so many individuals out of work, some will become desperate enough to commit crimes,” Heaner said.
Potential for stolen equipment, property damage underscores need for insurance
The impact of a commercial property burglary can vary widely based on the business and its contents, including the type of equipment or stock stolen. “A burglary in a pizza shop, for example, has a different impact than, say, theft or burglary of a high-end jeweler,” Maher explained.
Property damage is another consideration and can significantly add to the overall cost of a burglary loss. According to FBI crime data from 2018, more than 56 percent of all burglaries involved forced entries and burglary victims faced about $3.4 billion in property losses — or an average of $2,799 per offense. “Burglary does not just carry a theft risk, it also carries a risk for vandalism,” Heaner said.
Commercial Property Insurance is essential for owners and tenants, said Maher and Heaner. These policies generally help cover losses related to theft, attempted theft, vandalism and malicious acts, and include coverage for losses related to business contents, equipment and stock and business owners should review their Commercial Property Insurance policy with their broker or agent to confirm whether coverage is available.
“I always recommend investing in the broadest form of coverage available to best ensure coverage at the time of loss,” Maher noted. “Business owners should do research on trending perils of loss in their region and talk to their insurance broker or agent about all of the options and explanations for each form of coverage available.”
In the event a burglary does occur, commercial property owners should act quickly to report the incident. “I would recommend that the property owner or tenant notify their insurance broker or agent as quickly as possible to make sure that everything is in order and help recover from losses in a timely manner,” she said.
Heightened risk serves as reminder to update, clarify coverage
As news spreads of the rise in commercial burglaries, property owners seem to be revisiting their insurance coverage to confirm it has not been affected by the COVID-19 crisis.
“Business owners have had many questions,” Maher said. “If business owners need clarification on or have questions about their coverage, I would definitely recommend they reach out to their insurance broker or agent to review and discuss their policies.”
Brokers and agents are committed to making sure their clients understand their coverage, Heaner explained.
“The brokers and agents we work with are diligent in outlining for clients exactly what their insurance policy is offering coverage for and making sure to communicate clearly to clients when anything is excluded from coverage,” he said.
Security cameras, regular visits among top risk management strategies
Retail burglaries typically occur at night or after regular business hours. This was previously a much smaller window of time prior to COVID-19 shutdowns. “This larger window of opportunity is something to be concerned about and a reason for business owners to consider what they are doing to protect their investments,” Heaner said.
Business owners should know there are various steps they can take to reduce their risk of being burglarized, including proper lighting, window and door security, and the use of safes. Regular visits to the property are also advised, if allowed by law.
There are a number of measures that can be taken, and they must be tailored to the operation. Underwriters pay special attention to the measures businesses have taken to minimize the impact in the event of a theft.
“I strongly recommend upholding a prudent level of care and maintenance of one’s property during this time, and verify that all security systems and centrally monitored fire alarm systems are engaged and in working order,” Maher said. “If an alarm system is not already in place, it should be seriously considered. That is any business’ number one line of defense.”
Although burglar alarms are the most-used retail loss prevention system, the 2018 National Retail Security Survey found that their use decreased from 100 percent to 87.3 percent between 2015 and 2018. Even if alarm systems are installed, they must be turned on and well-maintained to function properly. In addition, business owners are encouraged to seek out community resources to keep extra eyes on their property.
“I have seen and heard of stories where local business communities belong to a business association and they work with the local police force to request regular surveillance, with a specific focus on high-target areas or businesses with high-target commodities,” Maher said.
Prevention and mitigation efforts may look different for each company, but they must be considered, Heaner added. “There are a number of measures that can be taken, and they must be tailored to the operation,” he said. “Underwriters pay special attention to the measures businesses have taken to minimize the impact in the event of a theft.”