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Insurance industry to help Government with riot compensation16 Aug 2011by Hugh Bryant The local police service is statutorily liable to pay compensation for losses and damage caused by a riot in England and Wales under the arrangements of the 'Riot Damage Act, 1886'. As a result, in recent history people have rarely been charged with a Section 1 offence (Riot). Instead offenders have been prosecuted for violent disorder. Nonetheless, in contrast to the poll tax riots of 1990 when a riot was never officially declared to render the  police liable for
compensation, Prime Minister David Cameron has chosen not to repeat
that
omission of the Thatcher administration and has classed the recent
civil unrest as riot. As a result, insurers that are settling claims worth over £200 million, will be able to claim their compensation back from Riot Act police compensation schemes. Indeed the insurance industry has pledged its support to the Government in administering the compensation that will include private individuals and businesses as well as the insurance industry. Helpfully, the Government has also agreed to extend the compensation claims period from two weeks to 42 days at the request of the Association of British Insurers (ABI) in order to render the administration of thousands of claims more manageable. The ABI has announced that "The UK insurance industry is committed to working in partnership with the Government and the police to play its part in helping businesses and communities recover from the damage." As part of this effort, the insurance industry has offered the Government senior claims directors to provide strategic advice, technical claims handlers to help with adjudication, and actuarial assistance to accurately quantify the cost of the scheme. It has also offered help to draw up suitable claims forms as well as assistance in negotiating the appropriate compensation rates with loss adjusters. While most of these individuals will be existing employees of insurance companies that are also seeking compensation through the scheme, this conflict of interest need not be an impedement to working with the Government and police as long as situations where a potential conflict of interest could occur are taken into account by the publically-funded administrators of the schemes. With the Government now owning a major share of the RBS, the bank has been obliged to respond, with some fiscal discomfort, with a level of civic responsibility commensurate with the public's majority shareholding by loaning to businesses effected by the rioting at a zero level of interest. The Government has aimed to respond rapidly and decisely to address the recent civil unrest, being keen not to be seen as having been forced onto their back foot by these events that point to fundamental rifts in the cohesiveness of inner city communities. Their plans to compensate those affected by the riots as quickly as possible will be widely welcomed. However, the public coffer is under conderable strain owing to the national and global debt crisis and there will be likely battles ahead for claimants to secure adequate compensation. As we reviewed in a recent article, comprehensive car insurance covers riot damage. However, third party only cover does not. |
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