Most insurers providing commercial property insurance in the UK are members of Pool Re, and have agreed to offer terrorism cover as defined under the scheme to any client or prospective client who requests it to be included in their commercial property policy.
A list of insurers participating in the scheme is shown here. It includes all of the most significant providers of commercial property insurance operating in the UK and comprises both UK and overseas companies as well as syndicates operating within the Lloyd’s market.
On request by a policyholder, an insurer participating in the Pool Re scheme will quote a premium for the inclusion of terrorism cover. If the quote is accepted, terrorism cover will then be added to their commercial property policy. Alternatively, the insurer may simply include the cover within its standard policy without the need for separate consideration by the insured.
The cover provided is for damage to property (and business interruption losses resulting from such damage if that cover has also been selected) caused by an act of terrorism,
(for more detail about the definition of an Act of Terrorism click here;
and about the cover provided, click here).
Any policyholder which has taken this cover and sustains damage as a result of an act of terrorism should contact their insurer, who will arrange for the claim to be considered under usual claim procedures.
Pool Re has arrangements with all its members under which it will reimburse them the cost of the claims they pay under the terrorism cover they provide to their policyholders, subject to a loss retention which they must pay themselves. Insurers pay premium to Pool Re for this cover; the retention varies between insurers depending upon the size of their terrorism insurance portfolio.
If losses should be so large that all Pool Re’s reserves are exhausted by claims made upon it by its member insurers, Pool Re would be able to draw funds from the UK government to enable it to meet its obligations. Pool Re, in turn, pays a premium to government for this cover, and would be required to repay any funds drawn down in this way from its future income.