UK’s government-backed terrorism reinsurer Pool Re has secured Parliamentary approval to offer coverage for losses sustained by businesses after a terrorist attack.
The Counter-Terrorism and Border Security Bill 2018, which was recently granted Royal Assent, will allow Pool Re, for the first time, to offer coverage to non-damage business interruption losses.
Prior to the new regulation, Pool Re was able to reinsure only those losses that were sustained in case a company’s premises had been physically damaged by terrorist attack.
In the 2017 attacks on Manchester and London Bridge, the gap in insurance coverage was highlighted when they suffered significant business interruption losses for which they could not be compensated.
Pool Re CEO Julian Enoizi said: “Today’s amendment changes that. We have worked very closely with the government, and with the industry since it opted to mutualise the non-damage risk in 2017.
“Perhaps more importantly, we are already collaborating with business federations, local authorities, brokers and our member insurers, all of whom need to have open conversations with their customers about just how much may depend on having this cover if the worst should happen.”
The British Insurance Brokers Association (BIBA) has also welcomed the move. It said that the changes contained in the regulation will help businesses and increase resilience.
Economic secretary to the Treasury John Glen MP said: “We will not allow terrorists to change our way of life. So when businesses raised their concerns about a gap in insurance cover following a terror attack, we worked with Pool Re to come up with a solution.
“Today, we’ve changed the law to give businesses peace of mind, helping them to insure themselves against financial loss as a result of a terrorist attack, even if there is no physical damage to their property. This means businesses will be able take out new and comprehensive policies to protect them in the future.”