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Unfortunately, terrorism is a word that is becoming more and more common in the world today. Post 9/11, attacks have become more frequent, and as security has stepped up so too have attacks using everyday items such as cars or knives.
Despite the risks of businesses falling victim to terrorism attacks, it’s still something that some clients feel they don’t need or find difficult to understand.
One product that has become more visible to businesses in recent years is cover like non-damage denial of access, for when trading is not possible due to a terrorism attack. This became a focal point after the Borough Street Market attack, when many of the traders were not insured for this type of eventuality, and suffered great losses when they were forced to shut for five days.
This is something that brokers and insurers can talk about with clients to stress the importance of certain types of terrorism cover, according to Geoff Stilwell, CEO and managing director of Beech Underwriting.
“One of the things we stress to all our commercial clients is if there were an event like Borough Street Market, could you survive without trading for a week?” Stilwell said. “The answer is probably no, 99.99% of businesses couldn’t.
“For example, if you’ve got a nightclub somewhere in a city centre, they would be very foolish not to have non-damage denial of access insurance.”
Despite a reinsurer like Pool Re having only just got royal assent to offer cover for businesses impacted by terrorism but not directly physically hit by an attack, Beech has been offering this type of cover for quite some time.
“We have offered non-damage denial of access for over 10 years as an optional extra,” Stilwell explained.
The cover is for when businesses surrounding an attacked area have to close, for example following the Borough Street Market attack or Manchester Arena bombing. It can then cover the costs for that business, up to the insured amount, until it can reopen shortly after.
“Non-damaged denial of access cover is designed to safeguard a client. If an incident happens, like it could be a bomb going off or an incident with a machete, and they close off the street for two or three days, that’s what it’s there for,” Stilwell said.
Clients themselves can choose how much to be insured for, with guidance from a broker or underwriter, starting at a small amount and going upwards to millions of pounds.
“We offer our clients limits, and they can buy whatever limit they want,” Stilwell explained. “It starts at £50,000 upwards, obviously the premium is adjustable.
“I know of some hotels which have been affected, I won’t say where, and it’s cost them millions, absolute millions. We’ve got one customer that’s got £5 million [in cover].”
The most important thing, however, is for clients to carefully consider the amount they will need depending on their business, and how long it is likely to be shut in the case of an attack.
“But what the client has got to do is put it into context and say ‘well it’s unlikely the business will be closed more than a week,’” Stilwell explained. “Whether it’s £50,000, £100,000, quarter of a million, half a million, they can have whatever limit they want within reason.
“But this isn’t something where you say ‘oh yeah, we’ll buy, I don’t know, £1 million worth of cover’ - you’ve got to look at your business logically.
“You say, I could be shut for a week or two weeks, how much will that cost me? And it depends where you are. If you’re in centre of London, or the centre or Manchester, they are not going to close a road for a month.”
