A little-known act is seeing the light of day as a result of last week’s rioting, offering compensation via the police for those who have been affected. But should the police have to pick up the bill for the uninsured?
My mum once caught me smoking, and warned me that if my father found out he’d ‘read me the Riot Act’.
Luckily for me mum kept schtum, and besides, the Act dating from 1715 was repealed in 1973. Good thing too, here’s the sort of thing it contained:
‘Our Sovereign Lord the King chargeth and commandeth all persons, being assembled, immediately to disperse themselves, and peaceably to depart to their habitations, or to their lawful business, upon the pains contained in the act made in the first year of King George, for preventing tumults and riotous assemblies. God Save the King!’
Protection under the Riot Damages Act
However, there’s another Act, the Riot Damages Act dating from 1886, which was never repealed and which could have profound implications for insurers, the police, and those who find themselves uninsured.
Vince Cable has issued a written Ministerial Statement on the Department for Business Innovation and Skills offering advice to businesses in the wake of the rioting, which is likely to cost ‘well over £100m’ according to the Association of British Insurers:
‘Any uninsured individual, homeowner or business that has suffered damage to or loss of their buildings or property as a result of rioting, can seek compensation from their Police Authority under the Riot Damages Act. It is normally the case that claims must be received within 14 days but to give people more time to submit these claims the Home Secretary is extending the period to 42 days.’
And it’s not only the uninsured. Insurers themselves may be able to claim back their payouts from the police in the same way. Speaking to the media, a spokesman for the British Insurance Brokers Association (Biba) – which represents 1,700 insurance brokers – said insurers had the same rights under the Act.
Who should foot the riot bill?
The implications of this are profound, particularly for a police service that’s already under significant financial strain and facing cuts. In a press release, The Association of Police Authorities states that police funds could be ‘decimated’ and it would make little sense in the face of a ‘shrinking police fund’.
However, from the insurers’ point of view the logic is clear. Insurers implicitly rely on a form of law and order to be able to issue insurance in the first place, and by and large it’s the police who are responsible for its enforcement. On the other side there’s the issue of premiums, which insurers were happily collecting before the riots and which may go up in some areas after them – as we’ve previously discussed, the strong possibility that riots will become a future exclusion for insurers.
So what do you think? Are the police ultimately responsible and do the insurers have a point, or should the insurance industry bear the brunt? Who will, and who should, really end up footing the bill?