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.”
Often, the entry method for perpetrators is to barge through walls, resulting in heavy damages and hefty repair bills.
When a vehicle is used to force entry into a building, the damage is often “extremely costly,” said Jason Scheurle, National Product Leader, Cannabis, Burns & Wilcox, based in Philadelphia, Pennsylvania. “Often, the entry method for perpetrators is to barge through walls, resulting in heavy damages and hefty repair bills,” he said.
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, said Kristen Flynn, Senior Underwriter, Commercial Insurance, Burns & Wilcox, Orlando, Florida.
“Based on the occupancies that have been targeted, it does not surprise me,” she said of the recent incidents. “Tobacco-related products, cannabis, sporting goods, fine arts — these are going to be high-target items for theft.”
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, Scheurle said, “smash-and-grab remains 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, for example, may be excluded altogether or have a separate sublimit, Flynn said. It is also common for insurance carriers to require that businesses have a central station burglar alarm to be insured.
“If they do not have safeguards in place at the time of a loss, their claim could be denied and they may not have any coverage,” she explained. In other cases, “they just may not be able to find theft coverage at all” if they carry high-target items.
Crime “is often excluded completely, or extremely limited to a small sublimit, such as $10,000,” Scheurle said. 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, Flynn said. “I absolutely think Business Interruption is important,” she said. “They still have bills coming in and employees to pay.” It should be noted, however, that there is usually a 72-hour waiting period before this coverage kicks in.
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,” Scheurle said. “Without proper insurance, operators will be forced to pay claims themselves, which has potential to severely impact, and perhaps even close, the business.”
Mitigating commercial property risks
To help prevent theft claims related to employee dishonesty, businesses can emphasize careful hiring procedures, Scheurle said. “In our experience, many theft claims originate from an employee of the insured. The employee may have knowledge of premises security, thereby enabling them to gain access to the building. This employee may share this knowledge with others as well, as to avoid direct involvement themselves,” he said. “To address this, businesses should practice good hiring procedures, which include things like background checks for all potential new hires.”
Camera monitoring systems are also key, especially in the age of businesses using social media to share security camera footage to help identify a theft suspect. “In today’s society, they are catching individuals in many cases through security camera footage,” Flynn said. “You want to make sure you have as many protective safeguards in place as you can to protect your business.”
A good broker or agent should explain what they are selling so that business owners are not blindsided in the event of a claim. If there is a theft sublimit, they can explain what exactly that is and why it is there.
Flynn stressed the importance of doing business with an insurance broker or agent that you trust who will make sure they give you the best terms available. “A knowledgeable broker or agent can explain what coverages you have or do not have,” she said. “A good broker or agent should explain what they are selling, so that business owners are not blindsided in the event of a claim. If there is a theft sublimit, they can explain what exactly that is and why it is there.”
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.”
