Aftermath of the August 2011 Riots

Three years ago, the scenes from across the UK resembled something you would have normally seen on a news report from a far away country. The riots of August 2011 however, were much closer to home. Causing up to £300m of damage, the riots highlighted the importance of insurance in helping business and home owners recover. More than 5,000 crimes were committed including 1,860 incidents of arson and criminal damage.

One thing that became evident in the aftermath was the importance of particular piece of legislation – The Riots Damages Act 1886. This Act means that anyone who suffered losses or damages during a riot is able to claim compensation from the local police budget. Even though this Act is over 126 years old, it was essential in providing help to those affected from the state; it is however, well overdue an update.

The government has proposed changes to the Act such as imposing limits on who is able to claim. Small and medium sized businesses are looked after but only those who have an annual turnover of less than £2m would be able to claim. The home office have argued that they are at the ‘heart of the community’, however back in 2011, only 9% of businesses who made a commercial property damage claim had a turnover of less than £2 million. According to the Association of British Insurers (ABI), if this legislation passed before the 2011 riots for every £10 that was paid out in compensation, only £1 would be paid out under the reformed Act.

One of the other issues highlighted was the surprising number of businesses with inadequate insurance. Many small and medium sized businesses in particular, need to be aware of the importance of regularly assessing the level and scope of their insurance cover.

Luckily riot damage is not something that happens often, but if you have any financial queries, please contact one of our team on 020 8545 7600.