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Terrorism insurance is a hot topic in the industry of late, with many of us still on high alert for attacks on British soil.
However, the general way that terrorism attacks are being carried out is changing. Until the tragedy of the Manchester Arena bombing, there had not been a large-scale bombing attack in the UK for more than 10 years.
What is happening is a switch to attacks using everyday items that are easier to obtain, and while they don’t usually hurt as many people at once, they certainly instil fear.
For example: car and van attacks. Since 2016, there have been at least 11 of these significant type of attacks across Europe, in Nice, Berlin, Stockholm, Barcelona and Paris.
London has experienced four such attacks, including one at Westminster in which five people were tragically killed, and the London Bridge attack in which eight people died and 48 were injured.
The way that some of these attacks are covered by insurance is sometimes tricky. Despite being classed as terrorism, because a car is involved sometimes these incidences will not be covered by terrorism insurance and instead by different types of cover.
Geoff Stilwell, CEO and managing director of Beech Underwriting and an expert on terrorism insurance, explained to Insurance Business that it is often judged on a case by case basis.
“It’s [car and van terrorism attacks] not covered by Beech, because I’m not a motor underwriter,” he explained.
“To be honest, I do not know how they are dealing with it. I believe it’s being covered under motor insurance most of the time - the incident with the guy who drove over the bridge is being covered under that.
“In most of London of course, they’ve got these great big bollards up. But you see that guy on the bridge wasn’t classed as a terrorist. Which is a problem too.”
Despite these increasing acts of terrorism, and the threat becoming more apparent, Stilwell said that terrorism cover is difficult to sell.
“A lot of people don’t realise that actually terrorism is one of the hardest things to sell, probably next to life insurance. It really is difficult,” he said.
This is why brokers need to be across the details of when terrorism cover will apply, and of new cover requirements - like insuring blocks of flats against terrorism. Often you won’t even be able to get a loan without checking that the flat you want to buy has the cover in place.
“Most mortgage lenders are going to require terrorism cover now on residential apartment blocks,” Stillwell previously explained to Insurance Business.
This cover is usually organised by the property management company or residents committee who run the block, but it is the purchase’s responsibility to check the insurance is in place.
“If there is an incident and a block of flats is severely damaged or destroyed, the mortgage company is still going to want their money, whether or not you have an apartment left,” Stilwell said
“It doesn’t matter if it’s a £1 million house converted into flats, or a £150 million block of apartments – if there isn’t any cover for property damage caused by terrorism in place, and there is serious damage to it, who is going to pay for the repairs?
“Everybody has to realise that they could lose everything in the event of a loss. A house or flat purchase is one of the biggest purchases in most people’s lives – it makes sense to protect it.”
