Non Damage Business Interruption
Non-Damage Business Interruption (NDBI) cover is the most significant development for businesses since the inclusion of CBRN cover.

What is Non-Damage Business Interruption (NDBI) cover?

Catalyst for Change

A ground-breaking change in legislation created an opportunity for us to re-insure business interruption losses arising from a terror attack which are not contingent on damage to property.

We were the first terrorism pool worldwide to extend cover to include NDBI – Denial of Access or Loss of Attraction losses.

The SME gap

The gap in insurance coverage was highlighted in the 2017 attacks in Manchester and London Bridge, where small and medium-sized businesses (SME’s) were shown to be particularly vulnerable, with several caught behind police cordons or experiencing a reduction in footfall following the events. In the case of Borough Market, over 150 small business owners together lost at least £1.54 million over 11 days of disruption.

The challenge

Following the 2017 attacks Members’ requested that we consider NDBI risk. We worked closely with the industry and the Government to provide a solution, which came in the form of an amendment to the Counter-Terrorism and Border Security Bill 2018. This allowed us to cover losses incurred if a business cannot trade or is prevented from accessing its premises in the wake of a terrorist attack.

Before the law was changed, we could only re-insure losses incurred if a company’s premises had been physically damaged by terrorists.

Many SME’s remain uninsured

With the legislation passed, a growing number of Member insurers are signing up to this new class of business. We are working to help them model their potential exposure, and on tools to improve the take-up of this valuable cover among the UK’s SME sector. Businesses’ protection in the wake of an attack is only as good as their insurance policy.

SME’s form the backbone of the UK’s economy, but when it comes to terrorist incidents, they are usually uninsured and under protected. They tend to lack the resources of larger organisations to plan for, protect and recover from the consequence of attacks. What’s more, the Federation of Small Businesses (FSB) recently reported a take-up of less than 10% for terrorism insurance, reducing further outside of London.

This [passage of 2019 NDBI Legislation] demonstrates the Government’s commitment to ensuring that businesses can continue to secure insurance against the financial costs of terror attacks, and that Pool Re can maintain its position as an exemplar, world-leading partnership between government and the insurance sector.

John Glen, Economic Secretary to the Treasury, 2019

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