Can you predict a riot? Consider the risks

Insurance: Sona Insurance Solutions

Although I appreciate this edition of the magazine is dedicated to ‘Energy’, I have been reflecting on 2024 and some of the issues we faced as a country; issues that could impact us all.

Summer 2024 was tainted by widespread disorder across the UK, in the wake of the Southport attack. On July 30, the country witnessed violence against people, property and police, as civil unrest sprung up on a multi-location basis.

Businesses of all types became direct or indirect victims. Some business owners experienced physical property damage, or threats to themselves and their employees. Others suffered business disruption, having to vacate offices or retail premises on police advice, or taking a decision not to risk employees travelling to work. Reputational damage has also affected the businesses which employed those swiftly brought to justice for their actions on the streets, or for inciting violence online.

Are you covered?

The random nature of the protests, often in places where civil unrest is not usually witnessed, highlighted the changing pattern of such events and showed that almost any business can be caught up in civil unrest and suffer consequential losses. This means we could all consider the risk.

It all highlights the value of insurance. Physical damage – to homes and businesses – is covered as standard on a property insurance policy (in most cases), however some do contain riot or civil unrest exclusions. Non-physical losses need to be covered by a business interruption policy and the eligibility of a claim scenario would be dependent upon the policy wording. Claims relating to denial of access to a property, for instance, can typically only be made where add-on cover is purchased.

If no insurance cover exists, a claim can be made for property damage under the Riot Compensation Act 2016, within 43 days of the date when the riot ends.

There is more to consider. The UK’s terrorism threat is ever-present, complex and evolving. The introduction to Parliament of Martyn’s Law, making it a requirement for many public venues to increase their terrorism planning and response mechanisms, highlights that a terror-related attack can occur almost anywhere, not just in city centres or at transport hubs.

While nobody involved in July’s riots has so far been charged with terrorism, the former head of counterterrorism believes many actions verged on it. Should actions have been regarded as acts of terror, remembering that some Neo-Nazi groups are classed as terrorists, an impacted business would have probably needed to have terrorism insurance, or non-damage terrorism cover included in their policy, to make a successful claim.

This cover can protect those with one property or business, or a portfolio of properties in different locations. Some owners will find their mortgage lender insisting on terrorism cover, while others may voluntarily buy it for its business interruption, denial of access or loss of attraction benefits.

Discuss all business continuity and recovery options with us, and you should have a clear view of your cover choices. After all, you cannot predict a riot.