Press Release Information Sheet: London Riots 2011 Insurers and insureds need to act quickly or risk not being able to recover their losses
Update 12 August 2011
The Government has announced changes in legislation concerning the Riot (Damages) Act 1886 and we include links below to the relevant legislation that has come into force today. In particular this relates to the change in the notice period to 42 days and a change to the claim report form, a link to a pdf version is also included. Please note that we anticipate further updates during next week concerning the process of which we will keep you informed of.
Insurers and insureds need to act quickly or risk not being able to recover their losses
With the well publicised London riots 2011 and other towns and cities throughout the country resulting in millions of pounds of damage, both insurers and insureds need to act quickly or risk not being able to recover their losses.
We have received many requests for ad hoc guidance as to the position and so this information we hope will act as a basic guideline for you.
The Riot (Damages) Act 1886, (“the Act”)
The Riot (Damages) Act 1886, (“the Act”) allows insurers and insureds to claim for the cost of making good riot damage against the relevant Police Authority.
The relevant insurance policy might offer an indemnity in the first place, but there will then be the potential for the insurer to recover in turn from the Police Authority.
However any claim must normally be lodged with that relevant Police Authority within 14* days of the damage, otherwise there is the risk of not being able to pursue any claim under the Act.
Because of that requirement to lodge a claim within 14 days, most insurance policies require that insureds notify their insurers of the damage within 7 days. Failure to notify insurers of the damage within 7 days may result in the claim being rejected under the insurance policy.
Insureds, insurers and those with uninsured losses all share a common interest therefore in notifying all claims in a timely way both to insurers and to the Police Authority.
What can be claimed under the Act?
It is possible to claim against the Police Authority for loss or damage to houses, shops or other buildings and also property within those houses, shops and buildings.
What is not covered by the Act?
Protection under the Act is restricted.
There cannot be any claim for loss or damage to cars on the public highway nor for goods left in shops awaiting repair. Importantly there can be no claim for consequential losses, i.e. business interruption claims nor for personal injuries sustained in the riots.
Requirement to give notice
It is unlikely that most insurers and insureds will be able to quantify the losses sustained as a result of the riots within 14 days. In these circumstances, we recommend that notice should be given to the relevant Police Authority, within 14 days of the damage occurring, providing them with as much information as possible, including the time and location of the riot, the type of losses sustained and, if possible, an estimate of those losses and requesting an extension of time in which to provide the quantified claims. The Police Authority is not obliged to agree to an extension.
Where it is considered that there may be uninsured losses, insured’s should notify the relevant Police Authority of those particular losses within 14 days. That notification is quite separate to, and in addition, to any notification given by insurers in respect of the insured losses.
Restrictions under insurance policies
Insurers need to carefully consider their policies particularly with regard to business interruption claims submitted following denial of access to commercial properties and loss of attraction where there has been no physical damage to those properties and/or no strict denial of access. Policy wordings and so the scope of cover will vary but particular care is needed in the absence of immediate, causative physical damage.
*The Prime Minister has announced that the time limit in which to submit claims to the relevant Police Authority under the Riot (Damages) Act 1886 will be increased from 14 days to 42 days and the Secretary of State for Business, Innovation and Skills has confirmed this in a written Ministerial statement.
We continue to monitor the situation and will provide updates as and when developments occur.
If you have been injured please contact our specialist Injury Solicitor on 08000 556 570 or email us at: email@example.com
Do you know these rioters?
Metropolitan Police have turned to Flickr to help identify suspects involved in the riots that resulted in the arrest of 563 people who participated in the widespread looting, fires and destruction of businesses. Help the Police help you! View Metropolitan Police’s photostream