The Pool Re scheme has been set up by the insurance industry in co-operation with the UK government and is designed to ensure that insurance cover can continue to be offered by insurers for damage caused by acts of terrorism to commercial property in Great Britain.
Insurers that participate in the scheme offer terrorism cover as part of their commercial property policies when requested to do so by their policyholders. Each insurer must pay losses it sustains up to a threshold, which is determined individually for that insurer. For losses above that threshold, the insurer is able to claim upon reserves accumulated by the insurance industry on a mutual basis within a separate company,
Pool Reinsurance Company Limited (“Pool Re”). Should claims exceed these reserves, Pool Re is able to draw funds from government to enable it to meet its obligations in full, regardless of the scale of losses that might be incurred.