Police may pay damages
Retailers affected by the rioting of the past three days have been told that they could still recover their losses even if they are not insured – but have to act fast.
Companies without insurance can claim against their local police force under the Riots (Damages) Act 1886 (RDA), but have to make the claim within 14 days of the damage. Losses for business interruption are not covered under the RDA.
Stuart White, partner at City law firm Reynolds Porter Chamberlain says most insurers require claims for riot damage to be notified within a very short period – typically seven days – in order for them to claim against the police otherwise the claim may be rejected.
‘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.’