Government should consider funding a multi-million pound advertising campaign to ensure SMEs have correct cover
A report into the summer riots gives a scathing assessment of insurers response to claims, blasting the industry for failing to respond quickly and adequately to riot-struck businesses.
The independent report made public today is a huge blow to the reputation of the insurance industry, accusing them of ignoring the needs of smaller firms, while attending adequately to the needs of larger companies.
It will be presented to Prime Minister David Cameron and could lead to Government intervention into the industry to ensure a better response to future riot victims.
However, in one positive for the industry, the report raises the possibility of the Government backing a major campaign to make sure SMEs have the right cover in place.
The report does not give any evidence of brokers being at fault, instead the blame is placed squarely on insurers’ claims handing response.
The report, called ‘5 days in August’, says: “The insurance industry has not performed well.
“We are concerned at the large number of complaints we have received about the role of insurers.
“We heard repeatedly about delays and difficulties people and businesses were having dealing with insurance company.
“In most cases, the small businessman had fared worse, with the larger, national companies being best looked after.”
Part of the report then goes on to give accounts from business people who claim they were badly let down by the insurance industry.
The report says insurers communicated poorly, often through third parties. Some business were left without any form of compensation up to three months after being struck by the riots.
As a suggested action, it wants the authorities to “prompt the insurance industry to root out the cases where service has been poor and to ensure that customers who are facing severe trauma are dealt with effectively.”
The report also says there was a concerning number of firms that did not have the right cover in place or did not have any cover at all.
It therefore suggests that the “RDA (Riots Damages Act) be extended to include loss of trade or that the
Government commits to establishing an awareness raising campaign to encourage businesses to review
their insurance arrangements and ensure their coverage is sufficient.”
The interim report, was put together by the Independent Riots, Communities and Victims Panel. It was authorised by the Government after the riots.
The panel included the ex-chief executive of Jobcentre, a social project leader in Hackney, a leading lawyer and a life peer.
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