Does your business or home insurance cover riot damage and looting? Numerous riots broke out across the UK in summer 2024, some of which resulted in damages to businesses and other properties.
Many other businesses may have avoided damages, yet they would still have experienced some interruption to their operations, which may have resulted in significant losses.
In this post we’ll assess how riot damage, looting, and other forms of unrest might affect your insurance. If you have any questions about your cover, whether it’s your home insurance or your business insurance, call us on 0208 290 5460, or email info@anthonyjones.com.
Do Insurance Policies Provide Cover For Riots?
It is standard practice for insurance policies to include some form of cover for riot damage. Plus, there is a clear definition for what constitutes a “riot” in the Public Order Act.
Following the recent unrest in the UK, the business secretary Jonathan Reynolds has written to the Association of British Insurers to ensure businesses affected by the riots “receive the cover that they are entitled to through their insurance policies as swiftly as possible”.
We agree with this, but insurance brokers also have a role to play in this situation. We’re currently advising many clients who have suffered losses as a result of the recent riots. One point we keep making is that, for most claims, policyholders will have to demonstrate that they took “reasonable precautions” to mitigate loss.
Your Responsibilities to Mitigate Your Losses
How can you take steps to mitigate your losses when faced with something as volatile as a riot? Typically, this means anticipating likely disturbances in your area, and taking any necessary steps to secure your property. Your policy might also outline certain requirements for how soon you should report any damages to your insurer. In short, the sooner you make your claim, the better.
What is the Riot Compensation Act 2016?
The Riot Compensation Act 2016 (RCA) is designed to give victims of criminal damage or loss during a riot the right to fair compensation. If you find your insurance does not cover you for riot damage, you can submit an RCA claim instead. However, you must make a claim via your insurers first.
The RCA sets limits for the total sum that insurers need to pay. It’s capped at £1m per property, and the cover does not extend to business interruption losses. The RCA also makes police authorities liable to pay compensation for certain forms of riot damage, and even allows insurers who have paid claims for riot damages to seek compensation from the police.
What Might the Future Bring?
All risks property policies have traditionally included cover for strikes, riots, and civil commotion (SRCC).
However, earlier this year Airmic issued a report on Politican Risk in 2024. This report detailed how the whole insurance market needs to respond to global social unrest in this “year of elections”.
There has been a rise in SRCC claims since 2019. Some have estimated the total losses to be in the billions, and it’s too early to say how this might affect the future of insurance for political unrest.
Specialist Political Violence Insurance?
There’s a growing trend in numerous countries across the world to offer specialist insurance products for certain risks. In the UK, we may see a rise in specialist political violence insurance policies.
The UK Government is currently facing numerous financial issues, including an ongoing cost of living crisis. One way the Government may choose to save money might be through exiting the Riot Compensation Act, and instead allowing the insurance market to handle losses for civil unrest.
What if the Government Consider Rioting a Terrorism Offence?
We also need to consider how the UK Government might consider terrorism offences. Most policies offer cover for riots, but not for acts of terrorism. In most cases, policyholders need to get separate specialist insurance to cover them for any losses they may experience as a result of terrorism.
At its core, Terrorism and Political Violence Perils Insurance (including War), will provide cover for business interruption, along with extensions such as looting, denial of access, loss of attraction, and transit.
Do You Have The Cover You Need?
At the time of writing, insurers are still offering SRCC cover as standard in all risk policies. However, if the political unrest continues, expect the situation to change, and quickly.
At Anthony Jones, we will always be on hand to ensure you have the cover you need for all the risks you face as a homeowner or business owner. If you have any questions about your cover, whether it’s your home insurance or your business insurance, call us on 0208 290 5460, or email info@anthonyjones.com.
