BIBA: “Home Office decision on PCCs is a fundamental conflict of interest”

12th March 2015

The British Insurance Brokers’ Association (BIBA) is dismayed by the Home Office’s decision, in the Riot (Damages) Act and draft Riot Compensation Bill, for Police and Crime Commissioners (PCCs) to retain the power to decide whether an incident is a riot.  BIBA believes this is a fundamental conflict of interest.

BIBA believes that it should instead rest with a separate panel of independent officials which should be consulted upon. This is following the problems experienced in 2011 where some police forces and politicians would not acknowledge the events were a riot making it a very difficult for victims to establish a valid claim.

BIBA is also concerned that an excess on claims is being proposed, that claims will be decided upon on a case by case basis rather than riot areas being established, that motor vehicle compensation will be extremely limited and that consequential loss will not be recoverable.

BIBA is pleased that the cap on claims is not connected to the turnover of a business as originally suggested, but brokers have concerns that the £1million cap may not be sufficient for mid-sized and larger businesses and could result in challenges for some businesses seeking higher insurance limits.

Graeme Trudgill, BIBA’s Executive Director, said: “It should be down to an independent body to decide if the claim was caused by a riot, not the Police and Crime Commissioners. This is fundamentally a conflict of interest. If the police cannot maintain the peace then they should be liable to those victims who will rely on the compensation to get their businesses back up and running. This proposal from the Home Office is not in the interests of the victims, it is in the interests of the relevant police authority.”

BIBA also disagrees that cover for motor vehicles is only available where riot damage is not insured and that insurers cannot recover their losses from damaged motor vehicles.  BIBA also believes that consequential loss should be recoverable for businesses under the Act.

Mike Hallam, BIBA's Head of Technical Services, added: “Victims should be eligible to recover all costs to repair damage including any excesses as riot claims are clearly not their fault or within their control.”

On a positive note, BIBA welcomes the decision for a new Riot Claims Bureau to be established to handle damage claims and the move to publish central guidance.  BIBA is also very pleased that the timings for making a claim have been extended to 42 days to notify and an additional 90 days to produce the supporting evidence, along with verbal, email and phone notification of claims. BIBA is also pleased with the move to new for old cover and the introduction of interim payments.


Notes to editors

1. For further information please contact:

BIBA press office:
Leighann Forsyth, Head of Communications
020 7397 0223 

2. About British Insurance Brokers' Association

The British Insurance Brokers' Association (BIBA) is the UK's leading general insurance intermediary organisation representing the interests of insurance brokers, intermediaries and their customers.

BIBA membership includes just under 2,000 regulated firms having merged with the Institute of Insurance Brokers (IIB) in November 2011.

General insurance brokers contribute 1% of GDP to the UK economy and BIBA brokers employ more than 100,000 staff.

54% of all general insurance is sold by an insurance broker and they arrange 79% of all commercial insurance business.

Insurance brokers put the client’s interests first, providing advice, access to suitable insurance protection and risk management.

BIBA helps more than 400,000 people a year to access insurance protection through its Find a Broker service, both online and via the telephone.

BIBA is the voice of the industry advising members, the regulators, consumer bodies and other stakeholders on key insurance issues.