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It may be a disappointing sign of the times, but terrorism insurance has rapidly emerged as one of insurance’s hottest products in recent years – and now it has made an important breakthrough.
Economic Secretary to the Treasury John Glen has today announced that the Government intends to legislate to allow Pool Re to extend its terrorism insurance scheme to include non-damage business interruption insurance – something that was previously only offered by certain independent terrorism insurers, such as Beech Underwriting.
The reinsurer had been restricted by the 1993 Act only to pay out if physical damage occurred to commercial property – meaning that businesses, inside a police cordon, that suffer financial loss due to not being able to access their property or trade, were only covered if there was physical damage during a terrorist attack. It was a gap that Pool Re was keen to close.
“We welcome and applaud the Government’s commitment to amend the 1993 legislation to allow Pool Re to be the first of the global terrorism pools to overtly extend its cover to include terrorism related non-damage business interruption,” said Julian Enoizi, chief executive of Pool Re.
“This amendment will close the terrorism insurance gap for businesses up and down the country, which, combined with our efforts to make cover more affordable for SMEs and regional businesses across Great Britain, will increase the resilience of the economy. Businesses can be confident they will be covered in the event of a terrorist attack, and able to get back on their feet quickly for the benefit of their community, customers and suppliers.”
In addition, from April 2018, Pool Re will extend its cover to include material damage and direct business interruption caused by acts of terrorism using a cyber trigger.
Today’s announcement has received a warm welcome from BIBA too – which had called for the change in its 2018 Manifesto.
“Both BIBA members and MPs had raised with us the changing nature of terrorism which is leaving businesses exposed,” said Graeme Trudgill, BIBA executive director. “We raised our concerns with Pool Re on the need to extend their scheme. We also recognise the need to encourage more small businesses to buy any kind of terrorism cover as fewer than 3% of SMEs take up any cover at all.”
