Everything you need to know about riot damage claims

Peter Farrelly, COO of Sedgwick UK, a global provider of claims management and loss adjusting, comments on the ongoing race riots and how to deal with the risk of riot damage.

The types of perils we’re seeing and an estimate on claims numbers

We’ve begun receiving claims for riot damage from the Liverpool, Teesside, Hull, and Bolton regions, including several significant fire, theft and malicious damage losses across the retail, education and public sectors. Some premises still can’t be accessed. The situation is fluid, with further protests having occurred in Birmingham overnight. However, we’re not yet seeing the same volume of work as generated by the 2011 London riots. At this early stage, estimated claim numbers are around 10-15% of 2011 levels.

During the 2011 riots, an estimated 13,000 to 15,000 people across 66 areas were involved in the unrest. Five people lost their lives, and more than 5,000 crimes were committed, including 1,860 incidents of arson and criminal damage, 1,649 burglaries, and 366 attacks on individuals.

What approach is Sedgwick taking to sending out loss adjusters, given that the unrest is ongoing?

Securing evidence of the event’s cause at the earliest possible stage is crucial, and much of this can be gathered retrospectively from media and CCTV footage. However, we closely monitor social media and press updates to ensure our adjusters are not sent into areas with an ongoing risk of riots.

How recent riots have impacted the insurance industry

Under the Riot Compensation Act 2016, which applies to England and Wales, insurers and policyholders (in cases of uninsured losses) can file claims against the Policing Authority for property damage caused by riots.

However, there are important deadlines for claim notifications, and the recoverable limit is £1 million per address. Business interruption or consequential losses are not covered under this legislation, except for limited alternative accommodation losses where no insurance policy covers them.

It’s crucial to understand the correct recovery process and how the legislation differs in Scotland and Northern Ireland.

How the role of loss adjusters has evolved in response to increasing civil unrest

The insurance industry is always ready to respond to large-scale emergencies, including civil unrest. For adjusters, a swift response is essential, and we must demonstrate that a ‘riot,’ as legally defined, has occurred. While media coverage can provide evidence, we also need to obtain statements from relevant parties and secure photographs and CCTV footage. The responsibility lies with insurers and adjusters to prove that a riot took place.

What steps businesses can take to mitigate the risk of damage during riots

Having an emergency and recovery plan in place is essential, and it’s always wise to ensure that property security systems and fire alarms are functioning properly. Monitoring social media can help you stay ahead of potential riot hot spots and activate security measures for windows and doors before any trouble arises.

The most common challenges faced when adjusting riot claims

The recovery process is a crucial aspect of handling riot claims. It’s essential to gather sufficient evidence to prove that a riot has occurred and to comply with the strict time limits set by the legislation.

Technologies or tools used to improve the efficiency of handling riot claims

Digital claims handling portals, capable of processing a sudden and large influx of claims quickly, efficiently, and in real-time, are essential for responding to wide-scale events. For riot claims, these portals are crucial for meeting Police Authority deadlines for notifying and presenting comprehensive claims.

Trends observed in riot-related claims over the past few years

During periods of social and financial difficulty, protests, marches, and strikes can often escalate into clashes with authorities. Fortunately, riot claims in the UK are rare, with the last major uprising occurring 13 years ago.

Typically, the damage involves buildings, contents, and motor vehicles, where rioters have started fires and caused malicious damage. We’ve also seen numerous claims for stock theft. Significant business interruption losses can arise from direct damage and from denial of access to the affected area.

Image: Provided by 5WPR.

Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.