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They you take to the streets take to insurance

12th September 1981
Page 63
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Page 63, 12th September 1981 — They you take to the streets take to insurance
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Which of the following most accurately describes the problem?

We live in tense times, and rioting seems to be the price we have to pay, so what can the businessman do who wants to insure both himself and his property against violence?

John C. Vann has some answers

THE RACIAL violence which erupted in Miami, Florida, in May 1980 was a grim echo from the 1960s, when a string of similar riots broke out in cities throughout the United States. In early April 1980 trouble in Bristol helped to shatter Britain's complacency about violence in general. This present year we have seen riots in many areas, notably Brixton, Southall, Toxteth (Liverpool) and Moss Side (Manchester).

Not a few business people are growing more and more apprehensive. Where next is trouble likely to erupt?

Most businesses take out insurance on a combined basis, giving them a wide coverage against a variety of perils. But what about riots? Policies vary from insurance company to insurance company. Particularly is this so under a haulier's combined or comprehensive policy, as no standard wording has yet been established. However, a pattern has evolved. Normally, one section of the policy is on the lines that loss or damage is insured if it is directly caused by riot, civil commotion, strikes, labour disturbances or malicious persons.

Certain exclusions need watching. For instance, excluded is all such loss or damage caused in the Republic of Ireland or in Northern Ireland. This is understandable. Also excluded is the first so many pounds — usually £15 or more — of each and every loss caused by malicious persons. This is to eliminate small and niggling claims. All that sounds straightforward. Yet perhaps we ought to ponder on the classic definition of "riot": "a tumultuous disturbance of the peace by three persons or more assembling together of their own authority, with an intent mutually to assist one another against anyone who shall oppose them in the execution of some enterprise of a private nature, and afterwards actually executing the same in a violent and turbulent manner, to the terror of the people, whether the act intended were of itself lawful or unlawful". Quite a mouthful! But is does spell out in no uncertain fashion what the position is.

We now come to the legal niceties. In law, what does• word "riot" signify? Let us guided by a court case v back in 1907. In this cas( was laid down that the lowing five essentials are be in evidence before a exists at Common Law.

• Not less than three persc • A common purpose • Execution or inception the common purpose • An intent on the part of persons to help one anot by force, if necessary, agai any person who may oppi them in the execution of common purpose • Force or violence, merely used in and about common purpose, L displayed in such a man as to alarm at least one son of reasonable firmn and courage We need hardly add t Common Law riot is a mis meanour punishable by criminal law.

Then there is the f images) Act of 1886. This portant piece of legislation ikes it possible for one to over the cost of damage to )perty by riot out of the lice rate for the district (that from the Police Receiver). is is a legal right which arybody possesses.

(et there could be a snag. aring in mind the,five conions, proving the existence a riot may not be as easy as ,eems. As an example, how you establish and prove 'A rnmon purpose'?

"io what should a busissman do who suffers riot mage (assuming riot can proved) to his property d who holds an insurance licy covering the property ainst the peril of riot? 'could he claim from the lice authority?

There is nothing to stop 'n doing so, but it is not )ommended. A better way to put in a claim under his ;urance policy, but this has be done within seven clays er the loss or damage by it (or by civil commotion, ikes, labour disturbances malicious persons). The 3son for this is that the inrance company will claim im the police in the manner ascribed, but this needs to done within a period of 14 ys from the date of the currence.

By this procedure, the licyholder will be paid out his insurers — it is hoped, eedily. The insurers then ye the task of making revery of their outlay. This ight take several weeks or months, and such a delay could be detrimental to a business.

The Act states that payment of compensation depends on the conduct of the claimant. For instance, he or she must. not be a party to the rioting ori an accessory or part of a tumultuous assembly. Additionally, there must be no provocation on the part of the claimant.

What about looting? Is loss by looting insured: It is undoubtedly covered when allied to a riot or to any of the other perils listed. Normally, of course, looting is always tied in with some disturbance or other or some disaster or happening, such as a fire.

Turning now to a practical point, suppose you have submitted an insurance claim for riot damage in connection with your business. On investigation, however, it transpires that you are under-insured.

You may or may not be aware that the "average" clause applies under the fire, consequential loss and special perils sections of all commercial and industrial insurance policies. This means that if you are under-insured here, you are called on to bear that part of any loss in accordance with the proportion of the under-insurance.

As an example, if your fixtures, fittings, equipment and stock are valued at £60,000, and yet your contents sum insured is only £40,000, you would have to pay one-third of the loss your

self, because you are only insured for two-thirds of the value. So if the loss was £12,000 you would be paid a mere £8,000. Not a pleasant, thought.

However, bearing in mind your claim is on the basis of riot damage, you could then claim the balance of £4,000 from the Police Receiver. But your claim would need to be submitted within 14 days of the riot. The police can enlarge this time limit to 42 days, provided they are asked to do so within that first vital fortnight.

A point to watch in these circumstances is that you will be unlikely to know about the under-insurance (if any) until your insurance claim is under way. This could be more than 14 days allowed as regards the police claim.

So you would be wise to advise the police authority as soon as possible after the damage — and not later than

14 days thereafter — of wht has happened, and that yolli might be sending in a claim.'lf. you have to claim, you have thus paved the way within 14, day rule of notification.

Reverting to the Rickt (Damages) Act, motor vehicles are not mentioned therein, though this is hardiii surprising since there were not that many on the road In 1886. This is bad news for. those whose vehicles gOt damaged in a riot but who db not carry comprehensive insurance. For vehicles whi4h are burnt in a riot, third par* fire and theft insurance would cover any fire damage.

You might check your OVOI business policy to ensure thit it does cover riot damage. At the same time make sure that your sums insured are adiequate.

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