Business across the UK in Stockport, Liverpool, Hull, Sunderland and Belfast have suffered significant damage, reporting windows and facades smashed or set alight by rioters, and some looting, following widespread rioting across the country in the last couple of weeks.
Business Secretary, Jonathan Reynolds, told the BBC he had written to the Association of British Insurers (ABI) to help ensure businesses “receive the cover that they are entitled to through their insurance policies as swiftly as possible”.
Reynolds noted that when visiting Liverpool on Friday 9 August and speaking with small business owners who had been affected by violence and disorder, “[t]hey were unaware if they were not insured or under insured that there was still help available to them.”
Meanwhile, the ABI pledged to “work with [it’s] members, the government, and other stakeholders, to do everything [it] can to help customers recover as quickly as possible”.
Reynolds comments likely refer to a lack of awareness of the Riot Compensation Act (RCA), which gives eligible victims of criminal damage or loss following a riot the right to claim compensation.
Martin McTague, national chairman of the FSB (Federation of Small Businesses) also wrote to the Home Secretary calling for the government to ensure insurance companies treat SMEs fairly and process claims swiftly. McTague echoed Reynold’s observation that there is a lack of awareness among business owners of the help afforded by the RCA.
McTague warned that "if post-riot support is not activated and small firms are not signposted, many without insurance could be left without any compensation to restart their business." His letter sought cooperation between government, police and crime commissioners to communicate how small, uninsured businesses can claim for loss of earnings under the RCA.
"Alongside supporting the police response, many have tried to protect their premises and are amongst the first in line the day after to help clean up their business, neighbourhoods and communities”
"Local authorities, insurance companies and politicians of all stripes […] need to be ready to support their small businesses to rebuild, recover and get back on their feet”, he wrote.
The recent riots are the worst disorder seen by the country since 2011, when four days of riots, centred on London, cost the UK approximately £200 million and £500 million in damages, lost trading, and policing.
Whilst the ABI have said it is too early to estimate the cost of the riots, analysts at Morningstar DBRS have estimated that the total is likely to be manageable for insurers at below £250 million, as claims under £1 million per property can be covered by local police authorities under the RCA 2016.
Meanwhile, the unrest could put pressure on the profitability of certain commercial insurers and raise concerns for global providers of strike, riot, and civil commotion insurance.
Learn more
Our e-learning platform, the Development Zone, contains courses to help teams to assess and build knowledge on key areas following the riots- all whilst fulfilling CPD requirements. Useful courses include:
If you are not a Development Zone user, get in touch with the team at devzone@ukgigroup.com to discuss our services and access a 14-day free trial to view the system and it's features for yourself- no commitment, no cost!
About the author
Rebecca Matyear
Rebecca recently joined us in 2024 as a Senior Content Writer and has experience researching and creating multimedia content. With a keen interest in current and emerging industry affairs, Rebecca responds through a critical lens and, by promoting thought and discussion, aims to increase awareness of UKGI’s work.
Get UKGI Insight In Your Inbox
Regular business news and commentary delivered direct to your inbox each week. Sign up here