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Cost of riots expected to exceed £200m
The true cost to business of the last week’s rioting in London and other English cities is likely to top even the increased estimate of £200m, business leaders involved in the clean up have warned.
Shaa Wasmund, founder of business advice network Smarta.com, which along with Bristol-based Businesszone.co.uk has been helping to co-ordinate support for shop owners and other entrepreneurs hit by the riots, warned that an accurate bill for the clean up was unlikely to be arrived at for several weeks due to the fact that so many independent shops have been sent into turmoil.
“What we are more concerned about is the small shops,” she said. “Potentially there is no coming back for some of these businesses.”
The Association of British Insurers on Thursday doubled its initial £100m estimate of the cost to business and households after the looting and violence spread from a few London neighbourhoods to postcodes across the capital and cities as far north as Manchester.
The figure is being revised as insurance brokers update the ABI on cases they have processed and so it is likely to rise further, Liz Forster, an ABI spokesperson, explained. “I would be surprised if this was the last figure,” she said.
Under the Riot Damages Act of 1886, both the insured and insurers are permitted to pursue claims against the police authority, which effectively failed to keep law and order.
To do so they have had to file for damages within 14 days of the incident having occurred to the relevant police authority, although this was extended to 42 days by the government this week.
In addition, the insured must also report the incident to their insurer and this should be done immediately. It is essential that this procedure of “double reporting” is followed, according to lawyers.
The government has also said the uninsured may be able to make claims.
Troubled businesses may also be able to defer some tax payments through a dedicated helpline service launched this week by HM Revenue & Customs. The tax office said it would discuss practical solutions where tax records have been lost and review penalties imposed whenever possible.
By Jonathan Moules
August 12, 2011 5:25 pm