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£100m worth of damage caused by London rioters…

August 10, 2015

insurance

Image by: Alan Stanton

…and it looks like UK taxpayers could be footing the bill!

It has been estimated by the Association of British Insurers that damages caused in recent London riots could cost “well over £100m”.  With hundreds of businesses and members of the public affected by loss and damage, insurance companies can expect a vast amount of claims to be made in the coming weeks.

Although most insurance companies will be honouring insurance claims in this situation, a 125 year old clause states that insurers have the right to reclaim the money from the police authorities.  The Riot Damages Act of 1886 specifies that damages caused by those “riotously and tumultuously assembled” should be compensated for by local police Authorities, in this case The Metropolitan Police Authority.

So where does the taxpayer come into this?  The Met suggested in a statement to the Guardian that as there are no funds in place to deal with situation like this, the cost could come out of reserves which incidentally are funded by the taxpayer.  A spokesman for the Met said, “No specific fund is maintained by the Metropolitan police authority to cover claims against such contingencies, but we maintain general reserves to cover unexpected events. Such risks cannot be insured against.”

A partner at law firm Reynolds Porter, Stuart White explained:

“The theory is that the police are responsible for keeping law and order, and if they fail, they pay for the damage”. 

Barrister Daniel Barratt further explained “The police are required to pay compensation to any person who has suffered losses as a result, including those who have had property stolen,

This would cover not only the owners of the businesses, but (for example) owners of clothes which were damaged by looting of a dry cleaners.”

Those affected have been urged to make their claims as quickly as possible. The Riot Damage Act states that all claims to the police are to be made within 14 days and as such it is likely to be a requirement in most insurance policies that a claim of this nature be made within 7 days.

People are also advised to check with their insurance providers to confirm what they are covered for as it is possible that not everything will be covered.  For example, a car insurance holder who is covered under third party, fire and theft is likely to find that if their car has been burned out they will be covered by their policy, but they will not be in the event of a brick through the window.

 Do you think it is fair for the police to compensate those affected by the riots?  Who do you think should foot the bill for the cost of damages made? Let us know in the comments section below!

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