Advice for retailers who shut shops due to riots

Recent events have shown that even the anticipation of violent disorders can have significant financial consequences for businesses.

In many areas across the nation, retailers have shut shop in response to warnings of further riots. For many, these rumored disturbances didn’t occur, and the decision to close early resulted in the loss of trade for many retailers.

In the peak of summer holidays, the industry relies heavily on the daily foot traffic and even a short closure can mean a substantial loss of income. However, there is a way business owners can protect themselves against events beyond their control - business interruption insurance.

Business interruption insurance refers to the disruption of regular operations due to an uncontrollable event. It is a type of insurance designed to cover the loss of income a business has suffered after a “disaster”.

If you have business interruption insurance, it can cover your business for the loss of income when physical damage from riots, lootings or vandalism prevents your business from operating as usual. It can also cover the closing of a business if a disaster is due to happen in the area.

If you have closed or need to close due to the riots, chief executive James Lowman of Association of Convenience Stores (ACS) explained it is vital to record the decision to close and the considerations behind it.

“If the police came round and said they were expecting riots and advised you to close, note the time you were told and the officer who told you. Then, if it comes down to a debate about business interruption, whether you have to close or choose to close, at least you’ve got the facts to hand to be able to make the best case you can to your insurance company.

“Even if you’ve not had any official advice from the police but you don’t feel comfortable, we would absolutely support our retailer making that decision. If you don’t feel it’s safe for you and your colleagues, note the rationale for that decision. Then you’ve got a better chance if you have to have a debate with the insurance company about that.”

If you’re not insured or underinsured, riot-damage and looting can be covered under the Riot Compensation Act.

The ACS told Convenience Store that it is “pressing for the government to extend the Riot Compensation Act to include coverage for business interruption in these sorts of circumstances.”

Additional advice if your store has been affected by riots.