Riots and Insurance: Q & A

The last few days have seen disturbing scenes of rioting, looting and malicious damage to businesses and homes across many parts of London and other major cities around the UK.

If you have been affected by these recent events, please see the following guidance which we trust you will find useful:

Are you covered by insurance?

Most policies today are ‘all risks’, so you should be covered. However, everything depends on your policy wording, so look at this carefully. Do not just look at ‘riot’. Consider all relevant perils:

• fire
• theft
• riot, civil commotion and damage caused by malicious persons

There may well be some debate with the authorities as to whether all of the recent issues are deemed to be defined as events of 'riot', so in order to ensure that you are not penalised for any ambiguity in the interim, these incidents should initially be reported as and treated as riots.  The important action is to ensure that your Insurers have been notified, as your claim will be handled by your insurers in the usual manner and the debate will then be between them and the authorities.

You may also be covered for interruption to trading and the cost of temporary relocation under the terms of your policy.

Even if you have suffered no physical loss/damage, but you do not have access to premises, some business interruption policies will cover you for disruption to trade. Generally, business interruption claims can be complicated and you can consider, in the case of a large loss, appointing your own Loss Assessor.

What do you do if you are insured?

• Reading the terms of your policy is a must.

• UK property policies usually require you to give immediate notice of any theft or malicious damage to the police and have a crime reference number.

• As soon as you are aware of any potential loss or damage, contact your Loss Assessor/broker/Insurer immediately with as much detail as possible.  Your own policy will need to be reviewed for the specific timescale, however a requirement to notify Insurers within 7 days is common in relation to this type of event. Non compliance could cause issues with the acceptance of your claim, so by ensuring that you notify your Insurer immediately, and certainly well within 7 days, you will be minimising potential obstacles.

• Do note that you may have longer if your loss is simply theft or fire, but given the undoubted many grey areas and access difficulties preventing many from determining what has happened to their businesses, do not assume you have more time.  Direct communication with your Loss Assessor, Insurer or via your broker is key here, giving them as much information about the circumstances and extent of your losses as you can.

• If a claim is successfully made under the insurance policy, it will be your Insurers who will lodge a claim against the Police Authorities for the recovery of the outlay, albeit that supporting information and documentation will be required from you. Your full co-operation will assist greatly with the recovery prospects.

• Insurers will appoint forensics and loss adjusters to assess claims so you are more likely to deal direct with an adjuster who will seek full co-operation from you to provide particulars of the loss. You must co-operate with all reasonable requests in a timely fashion or risk your insurer declining cover. Again consider having your own professional Loss Assessor who will be highly skilled in the preparation of claims.

What if you carry a large excess or are uninsured/underinsured?

• You may have a claim under the Riot Damage Act 1886 against the police.

• The Home Office has not yet declared the recent ‘rioting’ as a riot under the terms of the Act.  However, this may not be necessary as there are other legal definitions available as to what constitutes a riot.  If you wish to preserve a right to claim then notice must be given to the police within 14 days.  You do this by notifying your local Compensation Police Authority and completing a claims form.  Please note that the Prime Minister has just announced in the Commons that he will extend this time limit to 42 days for any legitimate compensation claims.

• If you are partially insured because of a large excess or where you are uninsured/underinsured, you should notify both the Police Authority and your insurers, as above.

Final thought

• Do spend the time getting this initial claims process right. Failure to do so could cause you severe difficulties later on.

• In the event of any damage to your premises, you may be required under the terms of your lease to notify your landlord. However, it would be prudent to make such notification to such landlords as soon as possible, regardless of the lease provisions.

• Do not be led by the media in terms of what the Government can and cannot do or rely on this when making an insurance claim.

• Most Insurers will already have Loss Adjusters on the ground in the areas affected and should therefore be in a position to respond swiftly.  However, should you encounter any difficulties or have any concerns, please contact us at the earliest opportunity. 

• The Chartered Institute of Loss Adjusters has published some information on the Public Order Act 1986 and Riot (Damages) Act 1886 on the Property SIG website at:
  http://www.cila.co.uk/publication/briefing-notes/riots-recoveries

Contact

If you need claims advice or general assistance, please contact;

020 8446 6662 or email info-london@thompsonandbryan.com for our London branch

0121 428 4000 or email tb-info@thompsonandbryan.com for our Birmingham branch

0161 929 1177 or email info-manchester@thompsonandbryan.com for our Manchester branch

Useful websites

www.abi.org.uk – Association of British Insurers
www.shoosmiths.co.uk – Insurance Law