New guidance for riot compensation claims

The Chartered Insurance Institute has produced an updated guide for the compensation of claims in the event of a riot. The new guide has been published to make the application of the Riot Compensation Act (RCA) 2016 as clear as possible for those handling claims

The ‘Riot Claims Handling Best Practice Guide’, created in conjunction with the Home Office, the Association of British Insurers, the Chartered Institute of Loss Adjusters and the police, sets out core procedures and technical guidance for handling compensation claims against local policing bodies for riot damage.

Non-executive director of the Society of Claims Professionals and head of claims operations at Allianz, Jeremy Trott said that while he hoped the guidance will never be used, failing to plan for the worst would be irresponsible.

“During the 2011 riots, 30,000 businesses were estimated to have suffered a loss of trading profit and record numbers of claims were paid out by insurers," he added. "The linchpin of this report is not to predict if a riot will happen – no one has a crystal ball – but to be fully prepared in the event of one."

The guide outlines recommendations on a range of issues relating to RCA claims, including the use of delegated authority, how insurers can support an improved process, and the impact of social media in terms of how it can support community engagement. It also takes account of social media as a catalyst for spreading riot activity; it recommends that a riot compensation social media strategy is a necessity.

Large-scale riots are extremely rare events in Britain but can be costly when they occur; the 2011 riots resulted in roughly £200m in claims paid out by insurers. Prior to those riots the law had not been updated since 1886.

Detailed guidance on riot compensation claims (Source: CII & SOCP)

The core aims of ‘Riot Claims Handling Best Practice Guide’ are:

• to facilitate effective and fair claims handling;

• a smooth and well explained claims process for both claimant and claims handler;

• clarity in the outcome of claims; and

• helping riot victims, whether they are individuals or businesses, to get back on their feet following a traumatic setback.

The guide is accompanied by a more detailed report, which sets out a high-level model for RCA claims management in the event of a large-scale riot, from preliminary planning stages through to claims handling and ongoing improvements to processes.

Interested parties can access the guide here:

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