Property owners and their insurers need to act fast to make claims (whether subrogated or not) for compensation from the police fund for riot damage – and within 14 days of the loss under the Riot (Damages) Act 1886.
The Association of British Insurers (ABI) has this week confirmed that most (but not all) insurance customers will have cover for riot-related damage under their business or home insurance policies. Current estimates put the cost of the damage for insurers in excess of £100 million with the bulk of claims arising from damage to commercial properties. Claims against the police by those without insurance could be as much as another £100 million.
The majority of insurers require claims for damage caused by riots or civil commotion to be notified promptly – usually within seven days and with the requirement that supporting documentation should also be provided. If insureds fail to notify within the set timeframe, insurers may be within their rights to reject the claim. Property owners affected must therefore notify insurers urgently.
Property owners (those without insurance or those who have large self-insured deductibles) can claim compensation from the Police Fund under the Riot (Damages) Act 1886 (“the Act”), provided their claim is made to the relevant police compensation authority within 14 days of the damage.
Insurers paying claims for damage caused by rioting can also recover their losses under the Act by claiming the amount of their outlay from the Police Fund in the name of the insured (s 2(2) of the Act). Again, such a claim must be filed with the compensation authority of the police area where the riot damage occurred within 14 days of the damage. Insurers may be well advised also to consider including any excess/uninsured losses suffered by the insured in any such claim.
Making a claim
The claim must specify (a) the name and address of the claimant; (b) the day on and hour at which the injury, stealing, or destruction took place; (c) whether the premises are a house, shop, or building, where they are situated, and the nature of the claimant's interest; (d) the circumstances in which the injury, stealing, or destruction took place, in sufficient detail to show whether it was committed by persons riotously and tumultuously assembled together.
The claim must also state separately the sums claimed for (a) destruction of premises, (b) injury to premises (including injury to windows, fittings, or fixtures), (c) injury to other property in or on the premises, (d) theft or destruction of other property in or on the premises and regarding (c) and (d), must distinguish property belonging to the claimant from property belonging to others in his care.
The compensation authority decides on the level of compensation which appears just to it. In making its decision, the authority is entitled to take into account the conduct of the claimant – ie, what precautions if any, the claimant took or, any provocation on the claimant’s part.
Should insurers or other claimants be dissatisfied with the level of compensation awarded by the authority, they may bring an action against that authority (s4).
What is a “riot”?
It has been reported that the Metropolitan Police have refrained from referring to the recent disturbances as “riots” in order to avoid compensation claims under the Act. However, such a declaration is not a requirement under the Act. The Public Order Act 1986 defines a riot as “Where 12 or more persons who are present together use or threaten unlawful violence for a common purpose and the conduct of them (taken together) is such as would cause a person of reasonable firmness present at the scene to fear for his personal safety …” (s1).
This ancient Act is likely to come under increased scrutiny as a result of the present riots but as it stands it allows a route by which property owners can claim (either directly or via their insurers) compensation for riot damage from the police. However, the Act is rife with pitfalls for the uninitiated: timescales are tight and the format in which claims must be lodged is very specific. So property owners and their insurers are urged to lodge claims in the prescribed format as soon as possible to preserve their right to compensation. Moves are afoot by the ABI and others to persuade the Police Authority to invoke the extended 42 day period for lodging claims under the Act but at the moment the time limit is 14 days, and counting.