Traders in riot-hit parts of Birmingham are waking up to an “insurance hangover” with fears higher premiums may prevent many taking out cover for their stock.

As the West Midlands returns to a sense of normality following violent scenes across the region, shopkeepers have moved on from clean-up operations to assessing the long-term cost of the riots to their businesses.

Handsworth’s Soho Road was among the many areas which saw looting and vandalism during the disturbances – but even those shops not touched by the violence still expect to be left out of pocket through higher insurance costs.

It’s a familiar scenario for many shopkeepers in Handsworth, who remember the riots of the early 1980s which resulted in insurance firms refusing to cover stores’ stock in the area.

Dipak Patel, chairman of Handsworth Traders Association and owner of Uropa Jewellers, said: “We have had an insurance hangover since the riots of the early 1980s.

“For many of us, insurers would not provide any cover for Soho Road or Handsworth.

“We were raided in the ‘84 riots and we traded for 12 years without any contents insurance. When we were looted then we had insurance cover.

“But a couple of days after the riot, we had a call from our insurers saying they would cover our claim but after seven days they would close our policy.”

Mr Patel said insurers eventually started to offer cover for goods about a decade and a half after the 1980s riots – albeit at a much higher cost.

There are now fears last week’s riots could send those premiums even higher.

“They will definitely go up,” said Mr Patel. “Over the last 10 years insurers have been willing to come back in, but with a high premium for those living and trading in Handsworth. We will get insurance but it will be very expensive.

“But certainly corner shops and grocers just won’t think it’s worth insuring themselves.”

In the immediate aftermath of the riots, the city launched a major cleanup operation, supported by members of the public volunteering their services.

Attention is now turning to how best to support businesses in areas which saw widespread ransacking and violence.

Birmingham City Council has said that shops will be able to install shutters immediately without receiving planning permission first from the city council.

Deputy council leader Paul Tilsley said all businesses would be able to put in the security measures as long as standards set out in the local authority’s shop fronts design guide were followed.

They must then apply for planning permission, which the council will guarantee to support.

The scheme cuts out a typical three to four-month delay between applying for and receiving planning permission.

Businesses affected by the riots are also being urged to apply for compensation from the Government’s £20 million High Street Support Scheme.

The council is also considering the possibility of using Government money to grant rate relief to shops and other businesses forced into temporary closure by the riots.

Coun Tilsley added: “It seems likely that the fund can be used to finance measures that will get business trading again and meet short-term costs.

“Councils will distribute the money and could use it to reduce business rates, finance building repairs and encourage customers back to the affected areas.”

Meanwhile, some banks are offering support for small businesses directly affected by the riots.

RBS and NatWest will provide interest-free loans of up to £25,000 to small business customers directly impacted by the riots in Birmingham & West Bromwich for up to six months.

Paul Brookes, director of business banking for Birmingham, said: “We want to do everything we can for businesses affected by the riots.

“These loans will help firms waiting for insurance payments or needing urgent repairs to open for business as soon as possible.”

Lack of footfall as nervous shoppers and diners stay at home is another issue for shops and restaurants, which are already suffering from consumers reining in their spending.

Most traders report business is getting back to normal – but some areas are still not quite at the levels they saw before the disturbances.

Mr Patel said Handsworth would take a while to get the number of shoppers up to levels seen before the trouble.

“One of the major issues we face is getting people from outside areas to come to the Soho Road, as a lot of people will be put off.

“It’s better now, but it’s about 70 per cent of what it should be. This will take some time before people get their confidence back – but certainly cash flows are going to be very tight.”

In the Jewellery Quarter, high-class Indian restaurant Lasan last week described how diners were cancelling their bookings in droves in the immediate aftermath of the riots.

But customer levels are now returning to normal, Lasan chef director Aktar Islam said.

“Thankfully this week’s looking a bit better,” he said.

“Towards the back end of the week things started to pick up. People still remain wary but they’re braving it and trying to carry on as normal.”