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UK Riots - What You Need To Know
12th August 2011

On current estimates insured losses and damage suffered by individuals and UK businesses are likely to be well over £100 million following the riots in August 2011.

Most UK commercial buildings insurance policies cover a standard set of risks, including fire, explosion, malicious damage, riot and civil commotion and so, subject to any excesses and exclusions, the cost of repairing physical damage and business interruption will be recoverable under the insurance.

Individuals and businesses with insurance should therefore claim directly from their insurer as soon as they can. They should be aware, however, that under the statutory police compensation scheme (arising from the Riot Damages Act 1886), they can also obtain compensation for any uninsured losses (e.g. underinsurance or deductibles).

In practical terms, this means ‘double reporting‘ of claims to both insurer and the relevant police authority if any uninsured loss is incurred.

Compensation under the Riot Damages Act 1886

When a riot happens the statutory police compensation scheme is activated to provide compensation to organisations and individuals for losses. This compensation scheme has existed on the statute books since 1886 with its operation having stood the test of time for the last 125 years. There is no cap on the level of compensation that the police may have to pay to those persons under the scheme.

The scheme means that people who are underinsured or have no insurance have somewhere to go for compensation and redress. Insurers can also claim under the scheme for money they have paid out to their customers for loss and damage they have suffered as a result of the rioting, although they will be liable to pay for business interruption losses themselves as these are not covered by the scheme.

Contrary to some reports, neither the Home Secretary nor the police need to designate the events as a “riot” in order for the police compensation scheme to be activated. The law sets the criteria for this, for example the number of people (12 or more) causing a disturbance.

How to Make a Claim against the Police Authority

As per the Riot Damages Act 1886, a specific form must be completed to lodge a claim for compensation with the relevant police authority.

Customers will need to advise the police of the circumstances, nature and extent of claim, including:

(a)        the name and address of the claimant;

(b)        the day on and hour at which the injury, stealing, or destruction took place;

(c)        whether the premises are a house, shop, or building, where they are situated, and the nature of the claimant's interest therein;

(d)        the circumstances in which the injury, stealing, or destruction took place, described in sufficient detail to show whether it was committed by  persons  "riotously and tumultuously assembled together."

We would also recommend that you secure whatever evidence (e.g. CCTV, photographs or witnesses) is available that details exactly what happened.

Customers can download a claims form here which should be used for riot compensation claims. This form should be sent to the relevant Police authority within 42 days of the loss. 

Once all details have been completed, if you are located in London, the form should be returned to: The Directorate of Legal Services, Accident Claims, 1st Floor (V), New Scotland Yard, No 8-10 Broadway, London SW1H 0BG. For cases outside London please send details to your relevant police authority. Clickhere to find details of your local Police authority.

Time Limits for Submission of Claims to the Police

The main point of debate following the riots has involved the time limit for the submission of claims. With respect to the police compensation scheme, the Government has confirmed that this has been extended from 14 days to 42 days (from the first day after the damage occurred).

Claiming against your Insurer

It must be remembered that claims should still be submitted to insurers as quickly as possible. Although certain insurers have increased their claims notification period following the Government’s 42 day announcement (e.g. Zurich to 30 days) there is no consistent approach. Hence, to be safe, it is important that details of claims are reported to insurers within the deadlines provided in the policy wording, usually seven days post event. This allows the insurer sufficient time to enforce their subrogation recovery rights against the relevant police authority within the 42 day limit.

It is worth pointing out that if an insurer’s subrogated claim against the police authority fails because it cannot be proved that a Riot was the proximate cause of claim then the insurance policy will still respond subject to normal terms and conditions.

Risk Management Advice in Light of the Riots

In light of the social unrest please find enclosed some details of steps that you should consider either to reduce the potential for further loss or to prevent an incident from occurring.

Not only should you consider the potential physical loss arising from theft, malicious damage, riot arson, but you should also consider potential exposures to your employees and to third parties who continue to enter your premises following a loss.

Property Damage

  1. Consider hiring additional night time security staff to give a visible security presence and help deter attacks.
  2.  Expedite repairs needed to any fencing provided around properties if repairs are outstanding.
  3. Lock gates to fenced areas of premises at night - regardless of whether or not gates are in regular use.
  4.  Ensure any CCTV is fully operational and that adequate recording space is available. Also prominent signs should be displayed advertising the fact that CCTV is in operation.
  5. Ensure that any automatic fire protection and detections systems are operational and confirm that all control valves are locked open.
  6.  Locate and test any on site fire hydrants and make sure they are fully accessible.
  7. Clear ALL yard storage. Where this is not possible keep any combustibles well away from buildings. A 10m space separation should be the target.
  8.  Consider boarding windows if there is any direct threat anticipated for any particular area.
  9. Ensure all physical protections including, but not limited to, grilles and shutters are in place at the close of business.
  10.  Ensure any intruder alarm systems (where applicable) are in operation and set at the close of business.

 Employee Safety

  1. Consideration to be taken on an individual basis as to whether you should open for business.
  2.  If you are open for business then consideration should be given in respect of your employee’s journey to and from the place of business particularly if the journey could involve passing through known trouble spots.
  3. In the event of incident arising then you should give consideration to the best means of securing the premises, which in the event of arson may be to evacuate the premises entirely.
  4.  Advise employees not to engage any intruders.  

Third Party Safety

1.    Reasonable efforts should be made to ensure that visitors to the site following a loss are protected from the risk of injury.

Realty Insurances Limited is an independent intermediary, authorised and regulated by the Financial Conduct Authority (FCA).
You can check these details on the Financial Services Register by visiting the FCA's Website www.fca.org.uk or by
contacting the FCA on 0800 111 6768. Our FCA register number is 307515.

Registered Office: 58 Davies Street, London W1K 5JF. Registered in England No. 482966.
 
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