The Appeal court has recently has over turned a decision for the Police not to compensate for business interruption following rioting. The Police were believed to be liable for physical damage only as a result of a riot but, following the appeal driven by Sony, whose property was looted then set alight in the 2011 riots, the London Mayors’ Office are now duty bound to pay such losses – though not every single penny. This highlights the need to ensure that businesses have adequate “consequential loss” or business interruption insurance that indemnifies a business for loss of profits following an insured peril.

The warehouse owned by Sony was looted by roughly 25 who then proceeded to set the property alight causing the biggest single arson attack in Europe ever which burnt for over a week. There would be many mitigating factors connected with a consequential loss pay-out by the Mayor’s Office but perils other than as a result of rioting, such as escape of water or a fire, would be covered in full if insured correctly.

Business interruption is often perceived to be an additional luxury but many business would simply fail if this cover was not in place. Many cheap office insurance policies offer BI or “increased cost of working” as an option and is not necessarily expensive. Similarly, cheap takeaway insurance or cheap shop insurance policies carry this cover especially when there is a heightened risk of fire though this should not be occupation driven. Taxi Office insurance would also need increased cost of working insurance to enable the cost of moving to an alternative location to be paid for.

In a statement issued by the Mayor’s Office for Policing and Crime advised that it “noted” the judgement and “was considering potential next steps in the legal process”