Stand alone terrorism coverage
Miller has been involved in the placement of stand alone terrorism coverage prior to September 11th 2001, when cover for active terrorist areas such as Columbia, Indonesia, Spain, Sri Lanka and the UK was written by specialist terrorism / political risk underwriters; terrorism coverage in other parts of the world tended to be given by property underwriters.
After September 11th a number of all-risk underwriters started to exclude terrorism from all risk property policies and underwriting capacity for stand alone cover increased.
In the US, the Terrorism Insurance Act of 2002 (TRIA) was enacted as a temporary measure to help commercial insurers provide realistically priced terrorism cover and capacity following the September 11th terror attacks. However there are some issues surrounding this policy:
- TRIA was set to expire 31st December 2005 and its renewal in its current state is still uncertain ...
- Domestic Acts of Terrorism are not covered
- Potentially lengthy claims process, as any event must be confirmed as an Act of Terrorism by the US Secretary General
Other government terrorism pools have been created with some having gaps in coverage, for example religious and ideological Acts of Terrorism are not include in the UK Pool Re.
Stand-alone coverage
The problems associated with TRIA and other government pools mean that in many cases stand-alone terrorism cover may be more appropriate. The Lloyds T3 terrorism coverage includes both domestic and foreign acts of terrorism committed for political, religious and ideological purposes.
Extensions to coverage
Business interruption, contingent business interruption, 007 coverage, denial and access, rental value and liability (third party and employee) coverage can also be included, either as extensions of the policy or on a stand-alone basis.
Other political violence coverage options
For those clients with assets/ investments/ revenues or exposures in the developing world, we would also advise that cover is extended to cover political violence (as listed below). Many of these perils cross over and without a packaged approach gaps in cover can occur:
- War on land coverage essentials - coverage includes protection against war, civil war, rebellion, revolution, insurrection, civil war
- Strikes, riots, civil commotions (SRCC) plus malicious damage - coverage can also include protection against physical damage caused by the above