Insurance buyers cannot rely on the United Kingdom's 130-year-old riot law to compensate them for consequential losses caused by civil unrest, according to a landmark U.K. Supreme Court ruling.

In addition, revisions to the Riot (Damages) Act 1886 that the U.K. Parliament is considering would further restrict buyers' and insurers' ability to tap police for compensation after a riot.

The April ruling by the U.K.'s highest court overturned a lower court ruling that allowed Sony Corp. subsidiary Sony DADC and its insurers to be compensated by the police for consequential losses, also known as indirect losses, for damage that a Sony-owned distribution center received during 2011 riots in London.

In The Mayor's Office for Policing and Crime v. Mitsui Sumitomo Insurance Co. (Europe) Ltd. & others, the high court ruled that consequential losses — such as loss of profit and rental income — that Sony and its customers suffered are not covered by the Riot Act, which covers only physical losses.

On Aug. 8, 2011, amid U.K. riots sparked by a controversial police shooting, youths broke into the Sony distribution center in the London borough of Enfield, stole goods and started a fire that destroyed the warehouse, stock and equipment.

It is estimated the riots caused about £200 million ($292.2 million) in property damage across the United Kingdom.

In May 2014, the Court of Appeal in London ruled that the insurers could recover about £50 million ($73.1 million) from the police under the law.

Because of the 2014 ruling and the large number of claims received after the 2011 riots, the U.K. government commissioned an independent review of the law, resulting in the updated Riot Compensation Bill being considered by Parliament.

The proposal clarifies what constitutes a riot and includes a £1 million ($1.46 million) cap per claim that is limited to physical damage.

In its decision, the Supreme Court said it did not believe the 1886 law was intended to extend compensation beyond physical damage to consequential damages paid by insurers or captives that cover police forces.

Chris Owen, head of disputes at Bristol, England-based law firm TLT L.L.P., which represented the Mayor's Office for Policing and Crime — the Metropolitan Police, said many claims for consequential losses depended on the outcome of the case.

“The law was unclear in this area and largely written for a different era,” he said in a statement. “The Supreme Court ruling ... has clarified that the compensation payable by the Metropolitan Police is limited to the costs of repairing the damage done to property during the 2011 London riots.”

The Supreme Court ruling “means that MSIEu will not be entitled to recover our outlay in respect of the consequential loss claim,” said a spokesman for Mitsui Sumitomo Insurance Europe. “While disappointing, given the broader context of the substantial recovery already made regarding the material damage, overall this has been a successful outcome for MSIEu.”

The fact that three U.K. Court of Appeal judges believed that the Riot Act should cover consequential losses, but five Supreme Court justices did not, “demonstrates how unclear the 1886 act was,” said Chris Wilkes, a partner in the global insurance team at law firm DAC Beachcroft L.L.P., which represented Sony's insurers Mitsui Sumitomo and Tokio Marine Holdings Inc.

The ruling clarifies that the 1886 law covers only property damage and the new law being considered by Parliament will stipulate that, Mr. Wilkes said.

Many standard property insurance policies underwritten in the United Kingdom exclude coverage for riots, Mr. Wilkes said.

In many cases, the business interruption costs caused by riots likely would significantly outweigh the physical damage costs, he said.

John Hurrell, CEO of London-based Airmic Ltd., the U.K. risk management association, said that until the 2011 riots, few insurance buyers had had cause to make claims under the Riot Act.

Most buyers, he said, self-insure such losses or buy specific riot coverage.