“Terrorism shall mean an act of any person acting on behalf of or in connection with any organisation with activities directed towards the overthrowing or influencing of any government de jure or de facto by force or violence.” – Lockton Real Estate & Construction
Pool Re Terrorism Insurance
In the UK, following the Baltic Exchange bombing in 1992, insurers refused to offer terrorism insurance on commercial property. This lead to the development of Pool Reinsurance Company Ltd (Pool Re), a government backed reinsurance scheme, which now operates offering comprehensive terrorism insurance to its members, if claims outweigh collective premiums.
Pool Re covers commercial property but not private property, unless it is under a commercial entity such as a block of flats. The premiums are rated depending on what zone the property is in, (A) being the highest, which are the major city centres. Pool Re amended its coverage to an “all risks” cover after 9/11. Before it was based on damage from explosion or fire only, which was limiting. In July 2002 this was amended to include threats from Nuclear, Biological, Chemical and Radiological.
Independent Terrorism Insurance
It is possible to source alternative independent terrorism insurance, however most are not “all risks”. Most Private Property insurers cover a variance of terrorism insurance but this would not include any issues related to War and often exclude Biological and Chemical risks as well.
If terrorism cover is a requirement for your block and you don’t take it out the consequences could be very serious. Any losses would not be insured and the management company/ directors of the block could be held responsible for the loss and subsequent payments.
If you’re in any doubt about terrorism cover for your property, speak to an insurance broker who can take your details and properly advise you on how to proceed.
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