Insurers of property, machinery, stock and the like in the UK do not provide cover for damage caused by acts of terrorism. This is perhaps not surprising. Insurers have taken the view that losses from terrorism could be so substantial as to threaten their financial stability.
In many countries losses caused by terrorism may be compensated by the government. This is not so in the UK. The risk is yours and yours alone. The attitude of the UK government stems from the days when IRA terrorism was at its worst. The government of the day took the view that it didn’t really want to give the IRA an incentive to bomb major targets in the knowledge that it would be the government who would foot the bill.
As a result of this attitude, the government and insurers got together to form ‘Pool Re’. Pool Re is an insurer, funded by insurers, who operate in the UK and ultimately are “reinsured” by the government. Its sole purpose is to provide terrorism cover in the UK and indeed it has done so successfully for many years now. Your business may choose to buy bespoke terrorism cover that can cover liability too.
Many of our clients already buy Pool Re. Certainly those who own key assets in major cities do and banks often insist on cover before lending on a property. But if you don’t have cover, is it time for a re-think?
We used to think of terrorism in terms of IRA bombs. In recent times the threat has evolved from ISIS or ISIS inspired individuals. Whilst acts of terrorism are extremely rare they are on the increase and of course the consequences of an attack can be substantial. Rather than leave your assets exposed perhaps it is time to buy cover? Premiums reflect risk and so locations within major cities and major attractions and events will attract higher premiums than those ‘in the sticks’. Sadly the problem is not a short term issue; David Cameroon spoke recently about the problem being with us for a generation.