Report praises insurers' riot response as police slammed

The insurance industry has been praised for its response to the 2011 UK rioting in a government-backed report into the issue by the Riots Communities and Victims Panel.

The report, ‘After the Riots’, also recommended that the Riots (Damages) Act 1886 be widened to include cover for loss of motor vehicles, to clear up if business interruption losses are covered under the act and to improve the legislation generally.

The riot act says that police authorities are responsible for preventing rioting and for paying claims for the uninsured and underinsured who suffer property damage from rioting. It also lets insurers claim back money from police authorities for the riot claims paid to their policyholders, but the current wording caused wide confusion about the scope of the compensation.

Last December the panel published an interim report which criticised the industry for being slow to compensate riot victims and for sidelining claims by smaller businesses in favour of larger firms.

But the latest report said that the “vast majority” of riot claims handled by insurers had been settled or had interim payments made.

However, the report criticised the claims response of police authorities.

The report said: “It is now almost eight months after the August riots and there are still small businesses which have yet to receive a penny in compensation for the losses they have experienced.

“This is threatening the viability of some businesses and still needs to be addressed urgently.

“We would again urge police authorities and the Home Office to ensure that all outstanding claims are urgently dealt with and legitimate claims paid without further delay.”

The Metropolitan Police Service was singled out for criticism in the report, which said that the force had only settled 396 of the 2,538 claims lodged as of this month.

Police authorities have only settled half of all valid uninsured claims in this time, the report said, with only 181 out of 342 claims being settled in London.

The report also suggested that the riot act should be rewritten. The Home Office is carrying out an internal review of how the act works, but the panel urged the government to carry out a public consultation to let communities and victims have their say on the new wording.

At the moment the act is clear that insurers can claim back property claims from police authorities, but does not shed light on business interruption.