On 11 August 2011, the Association of British Insurers (ABI) published Guidance on the legal position of riot compensation. The Guidance confirms that the occurrence of a riot activates a statutory police compensation scheme under the Riot (Damages) Act 1886 (RDA 1886). The scheme compensates organisations and individuals for losses that they could not possibly have predicted.
The scheme applies to all persons and organisations who suffer a riot-related loss, whether or not they are insured. Insurers are also able to claim for the amount of any claims paid out to their policyholders in respect of riot-related losses and damage.
The events do not have to be designated as a riot to fall within the remit of the scheme. Under sections 2 and 3 of the RDA 1886, losses will fall within the remit of the scheme provided that the event giving rise to these losses falls within the scope of the offence of ‘Riot’ under section 1 of the Public Order Act 1986.
There is no cap on the level of compensation that is payable by local police authorities. A person or organisation submitting a claim for compensation under the scheme is normally required to lodge a claim within 14 days of the day on which the damage or loss occurred. However, on 11 August 2011, the Prime Minister announced that the period for the receipt of claims is being extended to 42 days.