Good Practice Guide
09 March 2020
16 March 2020
How to understand and clarify if clients have sufficient cover if they are affected by an act of terrorism.
The threat landscape in the UK is constantly changing, with increasing unpredictability. While standalone terrorism cover was offered in the 1990s, demand for the product increased significantly after property insurers began to exclude physical damage due to terrorism from their policies following the terrorist attacks in New York on 11 September 2001.
Islamic extremism has seen a shift from planned group attacks to isolated low complexity acts by individuals. The recent classification of Extinction Rebellion as a ‘key threat’ by counter-terror police also demonstrates the range of ideologies that are identified as extreme. With many different reasons behind terrorism, not only are counter-terrorist operations covering a wide range of causes, insurers are also constantly trying to catch up with how to protect those affected.
However, it seems many businesses still do not have sufficient cover. According to Pool Re1, 43% of businesses interviewed after the Manchester Arena bombing in 2017 did not have any continuity, disaster recovery or crisis plan in place. There were also estimated losses of £1.4m after the London Bridge and Borough Market attacks in 2017 due to restricted access to business premises during the investigation.
This Good Practice Guide looks at the different ways insurance brokers can provide coverage against a terrorist attack by examining the following:
- how terrorism is defined
- how insurance and reinsurance can provide a solution
- who needs cover against acts of terrorism
- risk eligible for terrorism cover
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.