A 126-year old British law allowing insurers to reclaim some riot-related losses from the police makes it too easy to avoid paying and needs to be tightened up, the country's insurance industry lobby said on Wednesday.
The police turned down over half of the claims submitted to them by insurers after last August's riots, when three nights of looting and arson in several British cities cost the insurance industry 200 million pounds, the Association of British Insurers said.
"The Riot Damages Act is crucial in providing financial compensation to victims of riots who do not have property insurance or are underinsured, but the current lack of a standard approach has caused unacceptable delays and confusion," said Aidan Kerr, the ABI's head of property.
The 1886 law allows uninsured businesses and households affected by riots, as well as insurers facing riot-related claims from their customers, to seek partial compensation from the police.
The act only covers property damage, with insurers retaining liability for other claims such as business interruption costs.
The ABI said a clear, modern definition of a riot needed to be inserted into the legislation, as police had in some cases turned down claims on the grounds that the event that triggered the loss did not constitute a riot.
The act defines a riot as more than 12 people "riotously and tumultuously assembled".
(Reporting by Myles Neligan; Editing by Jon Loades-Carter)