Non Damage Business Interruption
In February 2019, we introduced the most significant development of our cover since the inclusion of CBRN risks in 2002. The Counter-Terrorism and Border Security Act 2019 made changes to Pool Re’s founding legislation, to allow us to reinsure business interruption losses arising from a terror attack which are not contingent on damage to property. The amendment made Pool Re the first terrorism pool worldwide to extend its cover to include NDBI – Denial of Access or Loss of Attraction losses.

Catalyst for Change

The gap in insurance coverage was highlighted in the 2017 attacks in Manchester and London Bridge, where small and medium-sized businesses 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 SME Challenge

Following our Members’ request that Pool Re mutualise the NDBI risk following the 2017 attacks, we worked closely with the industry and the government to provide a solution. With the legislation passed, a growing number of Members are signing up to this new class of business, as we work to help them model their potential exposure, and on tools to improve the take-up of this valuable cover amongst the UK’s SME sector. Businesses’ protection in the wake of an attack is only as good as their insurance policy.

SMEs 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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