Should I consider Terrorism Insurance for my business?
The peril of terrorism has been excluded from insurance policies since 1st January 1993 As a consequence, the UK government and insurance Pool Reinsurance Company Ltd (Pool Re). Primarily funded by premiums paid by policyholders, the government guarantees the fund although any such support must be repaid from future premiums. To date, despite paying over £600 million in relation to thirteen separate claims, no government support has been necessary.
Terrorism insurance is important for loss/damage to physical assets such as buildings, tenants’ improvement, computers, stock, general contents, contract works, own and hired in plant and addition it is usual for the policy to be extended to include Business interruption (loss of revenue or loss of gross profit) increased cost of working.
Many contracts such as JCT and NEC in the construction sector require such cover and majority of lenders/ mortgage companies require that the peril of terrorism insurance is covered.
Notable attacks
- June 2007 – Glasgow Airport incident
- February 2014 – New IRA parcel bombs to locations in Oxford, Brighton, Slough, Aldershot, Canterbury, Reading, and Chatham.
- March and June 2016 – Novichok poisonings in Salisbury and Amesbury, Wiltshire (although neither were designated as a terrorist incident)
- June 2016 – Murder of Jo Cox MP in Birstall, West Yorkshire
- March 2017 – Westminster Bridge incident
- May 2017 – Manchester Arena incident
- June 2017 – London Borough Market incident
- June 2017 – London Finsbury Park Mosque incident
- September 2017 – London Parsons Green incident
What are my options for Terrorism Cover?
Terrorism cover is traditionally placed with Pool Reinsurance Company Ltd (issued via the property insurer i.e. Aviva, AXA etc.) who provide cover for the peril of explosion and act as a government backed reinsurance facility for the provision of terrorism cover. However, there is another option for the purchase of terrorism cover which provides the extension of explosion cover to satisfy the contractual requirements outlined earlier.
In addition to obtaining renewals terms/quotations from Pool-Re, we will also provide an attractively priced alternative quotation and renewal terms via the Lloyd’s market.
Pool Re-Cover | Lloyds Cover |
Provides cover for chemical, biological, radiological or nuclear terrorism following damage to the building. | Excludes chemical, biological, radiological or nuclear terrorism |
The act has to be carried out on behalf, or in connection with an organisation. | There does not need to be a connection to any organisation |
Implies that more than one person needs to be involved in acts of Terrorism | A person can be acting alone (lone wolf) or with others |
The organisation must be aimed at influencing or overthrowing the government | The act does not need to be aimed at influencing or overthrowing the government its purpose can just be to put the public in fear. |
Pool Re non-selection rule, meaning that if Terrorism is purchase on one policy it must be on all policies/ properties. All or nothing principal | Insurers allow selection |
No excess | £250 policy excess |
The Consequences of Not Purchasing Terrorism Cover
If the board and/or director/ partner/ owner/agent elects not to purchase terrorism insurance they must ensure they are not contravening any contractual arrangements they hold, including with third parties who may have a financial interest in the property. In the case of a block of flats, this could include a fellow tenant’s mortgage agreement and so, if a terrorist incident happens and damages the property, the individual on the board who made the decision not to purchase the cover could be liable for the repairs personally.
Obtaining Terrorism insurance is a straightforward process, please contact Nick Taylor-Ward for further details.
Why choose Konsileo for your Terrorism Cover?
Our specialist brokers have a wealth of Commercial Insurance experience including terrorism cover. With brokers situated throughout the United Kingdom, we are well placed to provide a personal service for all your commercial insurance requirements.
