Insurers pledge riot payouts

The Association of British Insurers has said most businesses affected by riots will be covered by their insurance. Although insurers may not be the ones footing the bill.

by Emma Haslett
Last Updated: 11 Aug 2011
Even though he was insured, it probably won’t be of much comfort to the likes of Trevor Reeves, the man whose Croydon store, which had been in his family for five generations, became the focus of TV coverage on Monday night as it burned to the ground. But the Association of British Insurers has, at least, issued a statement confirming that the majority of businesses damaged during the riots will be covered by their insurance policies. Although, in a slightly strange twist, it could well be taxpayers that foot the bill for the damages.

The good news is that the ABI has pledged its members will react quickly to compensate business owners for both damage and any loss of trade they experience while repairs take place. And even firms which weren’t physically damaged, but lost business as a result – those stuck behind police cordons, say – may also be covered. Although Nick Starling, the ABI’s director of general insurance and health, said it’s important to check your policy. ‘We have every sympathy for residents and business owners who have suffered damage,’ he added.

Seems a bit of a departure from the huffing and puffing usually associated with insurers. But no wonder the they’re being so helpful: it turns out that under a law first introduced in 1886, they might not actually have to pick up the bill. Under the Riot Damages Act, insurance companies, businesses and individuals which have been hit by riots can claim their losses back from local police authorities.

Now, obviously, that’s going to cause Outraged of Milton Keynes and chums to grumble vociferously about taxpayers footing the bill for yob behaviour (and given the state of public finances, the timing couldn’t be worse). But the debate over public sector finances aside, it does at least mean that businesses without insurance can claim back their losses, as long as they get their application within 14 days. Which will come as a relief, if nothing else, to those businesses which were caught out.

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