If approved in Parliament, the new NDBI cover will include loss of trade caused by being unable to access, exit or use the insured's premises because of the actions of the police or another statutory authority when responding to terrorist activity. It will also provide cover for loss of business as a result of a downturn in customer footfall at insured businesses within a mile of a terrorist incident.
This is something that Airmic and many of its members have been urging for many years. At present, Pool Re can cover losses from terrorism only if there is physical damage to a policyholder's premises. Pool Re has worked with government for a change to the originating legislation, the Reinsurance (Acts of Terrorism) Act 1993 - currently going through parliament - for it to be able to cover losses caused to businesses by an attack like the one at London Bridge, where no premises were actually damaged.
"This valuable extension of terrorism cover will be welcomed by our members as it better reflects and protects the true potential damage from a terrorist attack," said Airmic deputy CEO and technical director Julia Graham.
Pool Re Chief Executive Julian Enoizi commented: "We are about to close a significant terrorism insurance gap for UK business. This gives confidence to the customers in the communities they serve that in the event of a terrorist attack, services can and will continue. All commercial property and business owners will benefit from the proposed cover, particularly small- and medium-sized businesses which are particularly vulnerable to business interruption losses following attacks, as was seen last year in both Manchester and London."
It is the second major addition to the Pool re offering in 2018. Earlier this year, it extended cover to include cyber terrorism, and awaits approval for legislative changes that will allow it to cover non-damage business interruption.
Separately, Pool Re has published its annual Terrorism Threat & Mitigation Report, which focuses on the key terrorist events and developments in 2018, with analysis from leading counter-terrorism experts. Alongside the report, Pool Re published new quantitative research into more than 4,300 global terrorist attacks since 2014, as well as outlining plans for its forthcoming non-damage business interruption cover.
This can be downloaded from poolre.co.uk