Insuring against terrorist risks
Insuring against terrorist risks

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Insuring against terrorist risks
  • What risks are covered?
  • Arranging cover

Pool Reinsurance Company Limited ('Pool Re') was formed in 1993 following a series of terrorism incidents in the early 1990s in London and elsewhere in England related to the situation in Northern Ireland at that time. The cost of these losses caused insurers and reinsurers to focus on the difficulties of providing terrorism cover for commercial properties, in particular the high potential cost of losses and the lack of any reliable method of estimating what the future loss experience might be. Insurers depended on reinsurers for financial protection should very large claims occur and, accordingly, both insurers and reinsurers decided they could no longer provide terrorism cover using traditional methods.

Most buildings insurance and business interruption policies provide cover against terrorist risks only up to £100,000 per event. On request by a policyholder, an insurer participating in the Pool Re scheme will quote a premium for the inclusion of terrorism cover. If accepted, it will then become part of their commercial property (or other relevant) policy. The cover provided is for losses resulting from damag