Does Riot and Malicious Damage Extension Provide Adequate Insurance Caused by Recent Social Activities?


Social activities started in Jun 2019 have caused substantial physical loss or damage to private and community properties, and resulted in business interruption causing severe financial losses to many individuals and companies.

Many of the affected parties, depends on the scope of coverage arranged under their property, and casualty insurance policies reported these incidents to insurers asking for compensation, mostly under the categories of malicious damage and/or riot.

Whether these claims would finally be covered and settled by insurers would, to a large extent, depend on the terms and conditions of each relevant policy including but is not limited to:

    • Whether the Insured suffers any “physical” loss of or damage to her Insured Properties and which resulted in direct consequential financial losses?
    • Whether the relevant insurance policy covers malicious damage, riot, civil commotion not assuming the proportions of or amounting to a popular rising or even “terrorism”, either under a separate policy or an extension to the relevant policy?
    • Whether the relevant incidents, based on which those claims were submitted, was an insured or excluded event according to the terms, conditions and definitions incorporated in the policy?

We understand that there have been serious legal arguments put forward by some insurers in some reported claims on whether those social activities fall within the scope of malicious damage, riot, or should be classified as “terrorism” according to the definition used in the relevant policies.

Many insurance policies arranged did not cover loss or damage caused by “terrorism” even though the scope of coverage had been extended to include “malicious, riot and civil commotion not assuming the proportions of or amounting to a popular rising”.

Latest Developments

Insurers in Hong Kong have substantially tightened up cover for riot, malicious damage by increasing premium rate, imposing low sub-limits and/or high deductible for all new and renewal policies since January 2020.  Some targeted locations, trades and brands have big difficulties in obtaining cover.  

Moreover, Hong Kong National Security Law (HKNSL) or officially called the Law of the People’s Republic of China on National Security the Hong Kong Special Administrative Region, officially enacted and put into effect from 23:00 on 30 June. Among other things, Article 24 under Part 3 of Chapter III defines “Terrorist Activities” as follows:

“A person who organises, plans, commits, participates in or threatens to commit any of the following terrorist activities causing or intended to cause grave harm to the society with a view to coercing the Central People’s Government, the Government of Hong Kong Special Administrative Region or an international organization or intimidating the public in order to pursue political agenda shall be guilty of an offence:

    1. serious violence against a person or persons;
    2. explosion, arson, or dissemination of poisonous or radioactive substances, pathogens of infectious diseases or other substances;
    3. sabotage of means of transport, transport facilities, electric power or gas facilities, or other combustible or explosible facilities;
    4. serious interruption or sabotage of electronic control systems for providing and managing public services such as water, electric power, gas, transport, telecommunications and the internet; or
    5. other dangerous activities which seriously jeopardise public health, safety or security.”

After the enactment of the HKNSL, Mr. Tong Ying Kit was the first person charged with inciting secession and engaging in terrorism under the national security law after he was accused of riding his motorcycle into a group of police officers during a July 1 protest, while carrying a flag bearing the popular protest slogan “Liberate Hong Kong; revolution of our times”.

Other than injury suffered by some police officers, there was no physical damage or injury specifically caused by Mr. Tong to 3rd party in the event.  However, there were physical damages to public and private properties in some demonstration events held on July 1, 2020 in different areas. 

Going forward, we believe, there will likely be more arguments in future claims adjustment involving social activities with violent activities on whether relevant events should be classified as “malicious damage”, “riot” or “terrorism”, in particular for those cases with people arrested and being charged with engagement in terrorism.  

To avoid potential arguments and have a piece of mind, we suggest you review the scope of cover provided under your property damage and business interruption policies and the relevant wording to determine whether additional protection is necessary.

Should you be interested to know more and looking for deeper professional advice, please contact us at:


Tel: 2165 2010