What is terrorism insurance?
Business owners, risk managers and insurers are concerned with mitigating the risks posed by increasingly prevalent, damaging and random terrorist attacks. Losses, costs, damages and expenses caused by acts of terrorism are typically excluded from standard commercial insurance policies, therefore terrorism insurance cover must either be added on as an extension or purchased as a stand-alone policy.
In 1993, the UK Government established the Pool Reinsurance Company (Pool Re), as a mutual insurance pool. The Pool Re scheme allows participating insurers to offer terrorism insurance. If Terrorism losses occur, insurers are reimbursed from Pool Re’s accumulated funds. If Pool Re cannot cover the losses, Pool Re relies on an unlimited loan facility via Her Majesty’s Treasury.
However, Inperio believe that the Pool Re scheme has limitations which mean it can be restrictive for some clients that have specific terrorism insurance requirements on large and diverse portfolios.