Commercial insurance industry liability to run high from riots

According to a recent statement made by the Association of British Insurers, the liability for the insurance industry at large, which includes the commercial insurance sector, could run as high as £100 million, or higher.

The ABI said that home and business insurance policies should cover looting and fire, and also provide accommodation for any who find their premises uninhabitable.  However some smaller firms without proper small business insurance may be facing large uninsured losses as a result.

Many buildings were damaged by fire in the riots, including Croydon’s House of Reeves furniture shop, which was over 140 years old.  Many other shops throughout London had to close their doors early, such as WH Smith and Waterstone’s.

The British Retail Consortium remarked that while a total figure has yet to be released, it was abundantly clear that riot-related damage costs will be running into the tens of millions of pounds at the very least due to loss of business, goods stolen, and damage done to properties.  Meanwhile, the Federation of Small Businesses issued the warning that the riots would mean that some of its members would soon be facing the prospect of permanently shuttering.

The Association of Convenience Stores added that at least 93 of its affiliated shops have been affected by the violence, either because newspaper deliveries could not be made to them or through direct knowledge.

The largest blow may come to the tourist industry, as images of rioting gangs and burning buildings are broadcast throughout the world.  Economic activity will also suffer from early office closures and public transport disruptions to the London suburbs, and pubgoers and shoppers may be discouraged by the mayhem, even further depressing consumer spending, experts say.

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