The Wall Street Journal: Businesses Eye Possible Political Protests as Looming 2024 Risk

The Wall Street Journal: Businesses Eye Possible Political Protests as Looming 2024 Risk


Jan 1, 2024, 8:00 AM 

In 2024, the U.S. election season will enter full swing against a backdrop of political polarization. With tensions high—and partisans frequently taking their grievances to the streets—some business leaders and advisers are looking warily at the risks.

Many U.S. cities last year saw large demonstrations on contentious topics, from abortion to climate change to the conflict in Gaza. Public protest on political issues is a quintessentially American activity, though not always cost-free. 

U.S. business leaders right now rank escalating political polarization generally as their second most important emerging risk worry after generative artificial intelligence, according to a report published recently by Gartner, a research firm that surveyed senior executives and risk managers. The polarization those executives referred to in that survey isn’t necessarily among just the public—the definition used in the question included risks of polarization in government itself. More than a third of board members said that U.S. election and political uncertainties pose the greatest risk to their company’s operations or outlook, according to a survey released in December by risk and compliance software company Diligent and information provider Corporate Board Member. 

“The last few years have made everyone aware,” said Tarique Nageer, a managing director at brokerage and risk advisory firm Marsh.

Many Americans are worried about the potential for political violence. In a survey by progressive-aligned Navigator Research released last month, 83% of respondents said they are concerned about political violence today. Nearly a quarter of Americans think “patriots” may have to resort to violence to “save” the country, according to a survey released in October by the Public Religion Research Institute in partnership with the Brookings Institution.

The Boston Tea Party, one of the most enduring examples of U.S. popular unrest, destroyed about $1.7 million worth of tea in current dollars, according to the Boston Tea Party Museum. More recently, the sometimes disruptive protests in the wake of George Floyd’s murder caused estimated insured losses of greater than $2 billion, according to one estimate by the World Economic Forum in a 2021 report. 

The Capitol attack of Jan. 6, 2021, caused estimated losses of $2.9 million to the government, but also helped change the way many business leaders think about political unrest.

The 2024 election could yet be a snooze compared with the high-temperature votes of 2016 and 2020. But political violence experts at insurance and consulting firms are also considering the possibility of a close and acrimonious contest that riles the faithful of both parties. 

Businesses in cities are often on the front lines. Starbucks locations have been recently vandalized by protesters motivated by the Israel-Hamas war. Chief Executive Laxman Narasimhan said the protesters have the wrong impression of the company and its beliefs. Target temporarily shut down 175 stores in May 2020 amid protests after George Floyd’s murder. In the run-up to the 2020 election, retailer Walmart temporarily pulled guns and ammunition from store shelves in anticipation of potential unrest. Representatives for Target and Walmart didn’t respond to requests for comment.

Businesses have tools to try to fortify themselves against local protests. Perhaps the simplest is plywood, which became ubiquitous in some locales after 2020s summer of protests. Some New York businesses had plywood available ahead of the 2020 election after the city police department warned them to take precautions for election protests.

The Hotel Association of New York City will try to push awareness during the election season and reinforce the use of good procedures among its members, said Vijay Dandapani, the trade group’s president. Many hotels in the city supplement security staff with “extensive electronic monitoring” to ensure public safety, he said.

Retailers already facing concerns over high levels of theft are prepared to cooperate with law-enforcement to thwart future violence, said Brian Dodge, the president of the Retail Industry Leaders Association, a trade group.

“We understand that societal tensions can run high during presidential election years, but lawlessness cannot be tolerated,” he said.

Some businesses also turn to third-party vendors that can provide real-time alerts on unfolding situations, including protests. AlertMedia, a software company in Austin, Texas, assesses threats and provides tools for subscribers to push out mass notifications to employees based on their location. 

That company sent out 20% more alerts about medium- and high-severity demonstrations in 2023 than 2022, said Sara Pratley, senior vice president of global intelligence at AlertMedia. 

“The increase in demonstrations and protests we’re observing globally will likely be true in the U.S. as well, particularly as we approach the primaries, large-scale campaign events and the general election,” Pratley said.

Some risk experts have tried to model the risk of disruption to business from unrest. Verisk Maplecroft, a risk intelligence group, has created a forecasting tool that takes into account 10 variables, such as the frequency of police killings, inflation, inequality and unemployment. The model assigns a single score for a country’s risk of losses from strikes, riots and civil commotion—what the risk and insurance sectors call SRCC.

Under Maplecroft’s model, the U.S. is currently rated as a moderate risk.

Political violence in the U.S. remains rare, said Robert Munks, Maplecroft’s principal Americas analyst. But “the amplification effect of disinformation on social media is likely to reach new levels,” said Munks. 

Insurance, though it doesn’t prevent loss, can help businesses recoup damages. Some companies in potential hot spots, though, may see higher premiums and higher deductibles as insurers look to the election, said Srdjan Todorovic, head of political violence & hostile environment solutions at insurer Allianz Commercial

“You’ve got a very high exposure to city centers,” said Todorovic. “You’re probably going to experience rate increases because of that riot risk going into the election year.”