Bangkok, May 2010
In Thailand, 2010, anti-government protests resulted in an estimated 60 billion Thai baht (approximately£1.2bn) worth of damage to property and businesses interruption. Whilst the initial financial cost may have been high, the true price of this incident, in terms of resulting impact on tourism, cannot be measured. Where does terrorism insurance fit into a scenario like this?
Despite the demonstrable impact on businesses, many of the insurance claims relating to property damage caused by the protestors, which included the destruction of the second biggest shopping centre in south-east Asia, remain in dispute.
Insurers are yet to settle claims due to differing interpretations concerning the peril that triggered the loss.
Was it civil commotion – which would be covered under a standard property policy – or was it politically-motivated terrorism?
The controversy exists because many of the insurers involved, on careful review of the facts, regarded damage in many instances to have been caused by an act of terrorism, for which clients are not insured under a standard property damage policy.
Further political violence in Tunis, Cairo and elsewhere should cause every company with operations in overseas markets to re-evaluate the adequacy of their risk management strategies to ensure as broad a range of perils is covered thereby reducing any uncertainty and dependency on the classification of an event.
To ensure seamless cover between standard property and political violence exposures, you should seek out combined property, terrorism and war policies that ensure protection against the impact of political violence and instability.