Businesses that have suffered from the current spate of rioting must act quickly or they risk not being able to recover their losses, warns City law firm Reynolds Porter Chamberlain LLP (RPC).
RPC explains that most insurers require claims for riot damage to be notified within a very short period - typically seven days - otherwise the claim may be rejected.
This is because the insurer can make a claim in the policy holder's name against the police to recover their losses under the Riots (Damages) Act 1886 (RDA). However, to do so that claim must normally be lodged within 14 days of the damage occurring.
Businesses that have suffered riot damage that do not have property insurance can also make a claim to recover their losses directly from the police under the RDA.
Stuart White, Partner at RPC, comments: "Riots have caused millions of pounds worth of damage over the last few days. Businesses that have suffered riot damage should notify their insurer as soon as possible so as to avoid being left without insurance cover. Any delay is an unnecessary risk."
"Some independent retail units have been completely destroyed by the rioters, making them dependent on recovering the value of the damage to start trading again."
"The good news for some of the smaller retail units that have been damaged is that even if they do not have a property insurance policy they may be able to recover the value of any damage sustained because of the rioting directly from the police."
"However the compensation under the RDA will not normally extend to the financial losses of the business while it is unable to trade. Trading losses are likely to be recoverable only by businesses with business interruption insurance."
Stuart White adds: "Given the scale of these riots and the current pressure on police budgeting there will doubtless be calls to reform a law that compels police forces to compensate businesses and individuals for riot damage."
"We will see whether insurers who cover police forces for the cost of RDA claims respond to these riots by pushing up the cost of their insurance."
Stuart White
Partner at Reynolds Porter Chamberlain LLP
