Vandalism And Arson Not A Riot And Not Subject To Single Deductible

Property	Self-Insured Retention
Occurrence	Covered Peril

A group of four young people broke into two neighboring schools in a school district on three separate occasions over a five hour period, vandalizing property and setting fires before leaving. At issue was whether or not "acts of vandalism and arson committed by several people out of public view may collectively be considered a `riot' for purposes of an insurance policy which employs, but does not define, the term." The trial court judgment that they did not was appealed by the insured.

The applicable package policy provided property coverage of more than $300 million per location, per loss occurrence, subject to a self-insured retention of $100,000 each occurrence. "Loss occurrence" was defined as a single event during which a covered peril damaged the insured property. If a single occurrence caused the entire loss, one deductible would apply to it; if not, three separate deductibles would be applicable.

The appeal court said: "Vandalism, arson or other acts, destructive as they may be, do not constitute a riot if they are conducted away from public view with the intent they remain unobserved." This was in conformity with popular dictionary definitions and understanding by the layman.

The court concluded that the damage was done on three separate occasions and, thus, that three deductibles were applied correctly. The cause, in each instance, was vandalism and arson. The overall loss was not a consequence of riot.

The trial court's judgment was affirmed in favor of the insurers and against the insured.

Editor's Note: Please refer, for additional information, to the definition of "riot" in PF&M's Definitions and Interpretations section.

North Bay School Ins. Authority, Plaintiff, Appellant v. Industrial Indemnity Co. ET AL., Defendants, Respondents. CA Court of Appeals, First District, Division Three. No. A054209. June 5, 1992.