Are you covered if your home or business premises are damaged during a riot? 

Author: Lee Cleaver, client account executive at Clear Councils Insurance

Rioting and civil unrest are relatively uncommon in this country. However, when violent disorder does occur, it can significantly affect communities, businesses, and individuals. Moreover, the insurance consequences of these events are substantial and can impact everything from property damage to business interruption.

What defines a riot?

A riot is usually defined as a violent disturbance by a crowd, often involving vandalism, looting, arson, and other forms of property damage.

Insurance definitions may vary, but unless stated otherwise, insurers will typically use the technical legal definition outlined in the Public Order Act 1986. According to this definition, at least 12 people need to be involved for the offence to be classified as a riot.

What does your insurance cover?

Most standard household and business insurance policies cover physical damage resulting from riots. This cover includes damage to buildings and their contents. For homeowners, buildings insurance usually encompasses the structure and any permanent fixtures, while contents insurance covers personal possessions. Furthermore, insurers will often provide or pay for temporary accommodation if a property becomes uninhabitable due to riot damage.

Where to turn when rioting shutters your business

The impact of riots can be particularly severe for businesses. Commercial property insurance policies usually cover damage to premises, but the comprehensive coverage of business interruption insurance is also vital.

This type of insurance not only compensates for lost income if a business is unable to operate due to property damage but also includes cover for denial of access, where businesses are restricted from accessing their premises.

Business Interruption Insurance includes the following:

• Cover for lost income: If your business operations are disrupted due to property damage from riots, business interruption insurance can cover the loss of income during the period you’re unable to operate.
• Denial of access: Some policies include coverage if you can’t access your business premises due to police cordons or other restrictions, which can be expected during riots.
• Non-damage business interruption: This can cover losses even if your property doesn’t suffer physical damage but your business is affected by the unrest.
• Damage compensation: If your business suffers physical damage, business interruption insurance can help cover the costs of repairs and replacements. 

Policy exclusions and the Riot Compensation Act 2016

In addition to insurance, businesses in England and Wales can also claim compensation under the Riot Compensation Act 2016 (RCA) for damage or loss during a riot. This is especially important where insurance policies exclude losses caused by riots or civil unrest or where a claim is declined by an insurer. In such cases, the act allows businesses to seek compensation from the local police claims authority if their property is not adequately insured.

Steps to take after riot damage

• Notify your insurer: Contact your insurer immediately to report the damage. Provide all necessary details and documentation.
• Report the damage to the police: Obtain a crime reference number by reporting the damage to the police. This is often required for insurance claims.
• Document the damage: Take photographs and keep records of all damaged property and any correspondence with your insurer.
• Check your policy: Review your insurance policy to understand what is covered and any exclusions that may apply.
• Consider the Riot Compensation Act: If your claim is declined, explore the possibility of compensation under the Riot Compensation Act 2016. You must do this within 42 days of the formal declinature or, if bypassing the insurer process, then the same timeframe of 42 days would apply to report the claim via the gov.uk website RCA claim form. 

While riots are rare, they can be devastating

Riots can cause significant disruption and damage, but understanding your insurance coverage can help mitigate the financial impact. Reviewing your policies regularly and ensuring you have adequate coverage for all potential risks is essential. Remember, in the event of a riot, prompt action and thorough documentation are critical to a successful insurance claim.

How to make sure your insurance is up to date

It’s important to remember that insurance policies generally renew annually. This allows you to review your cover and ensure it meets your needs for the upcoming year. However, if there are any changes to how you run your business, the products, or services you offer, or the value or location of your property, you need to inform your insurer immediately. Waiting for your renewal could leave you without insurance.