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Riot protests cause millions of pounds worth of damage

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Insurance companies could face millions in claim payouts due to the events that have happened in London, Liverpool, Birmingham and Bristol in the past few days. 

If the events are officially classed as riots under the Riot (Damages) Act 1886, which is looking increasingly likely, businesses may be able to recover the costs quickly.

The full cost facing insurance companies hinges on whether the disturbances are deemed a "civil unrest" under the terms of the Riot Act. If they are, insurers can potentially recoup expenses from a special police fund, but only for direct property damage, according to an expert in the insurance industry.

According to the law, a riot is 12 people or more acting with a common purpose and using or threatening “unlawful violence for a common purpose ... The conduct of them (taken together) is such as would cause a person of reasonable firmness present at the scene to fear for his personal safety”.

The Government has yet to declare that the scenes that unfolded over the past few days were "a riot", but most insurance policies also cover civil commotion.

However Tony Gibbs, sales director at Macbeth Insurance Brokers is less optimistic: "As for who is going to pay for the damage, in all likelihood it will be insurers who will pick up the tab and the end result could be higher insurance premiums for the already beleaguered business community."

He said that the situation may lead to insurers arguing that the police were not quick enough to act and consequently suing them under the Act.

A massive clean-up operation is currently underway in some of the worst affected areas in what is expected to be a lengthy operation. Users of Twitter and Facebook have been using the sites, which police also reportedly said were used by rioters, to organise the mass clean-up.

One Twitter account, @riotcleanup attracted over 18,000 followers in a matter of hours in the aftermath of some of the most destructive scenes Britain has seen in decades.

The clean-up operation began after the riots claimed its first life this morning. A man, shot in a car in Croydon, died in hospital, amid uproar over a reported quote from a police officer claiming, ‘we can’t cope’.

However Prime Minister David Cameron has promised 16,000 officers on the streets of London tonight, in the hope that further damage, and further fatalities, can be avoided, in the attempt to restore order.

By Ben Malkin

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