Myth 1: ‘Terrorism is already covered under my property policy’
Following an IRA bombing campaign in the City of London in the early 1990s, terrorism exclusions became commonplace in UK property wordings. Unless you have specifically purchased terrorism cover, either as an extension to your property policy or on a standalone basis, it is unlikely that you are covered.
Myth 2: ‘Terrorist attacks never happen in the UK’
Although terrorism incidents in the UK are infrequent relative to many other perils, their consequences can be devastating to property owners and businesses. Attacks are random and indiscriminate and can occur in both major cities and small towns. The current threat level in the UK (as set by MI5) is ‘severe’, which means an attack is highly likely.
Myth 3: ‘Terrorism insurance is expensive’
Due to high levels of market capacity, terrorism coverage has never been more affordable. CFC’s policy provides clients with the flexibility to tailor the policy to their needs, including the ability to select a first loss limit and pick and choose which locations in their portfolio to cover. This allows us to provide a bespoke solution at competitive pricing.
Myth 4: ‘But my premises is unlikely to be targeted, so why do I need the coverage?’
It’s important to remember that a terrorist attack doesn’t have to happen at your location for you to suffer a loss. For example, a nearby attack may prevent access to your business due to police cordons being erected and forensics taking place. Your business may also experience reduced footfall in the weeks and months following an incident, if people are fearful of returning to the area (often referred to as loss of attraction). And an attack doesn’t even have to happen nearby for you to suffer a loss. What if a key supplier or utility provider was targeted and you suffered a subsequent business interruption? It’s important to note that not all policies will carry these types of extensions, so selecting the right type of terrorism insurance for your business is crucial.
Myth 5: ‘All terrorism policies are the same’
There are two main types of terrorism coverage available. A follow-form policy, which tracks the terms and conditions of the underlying property policy, or a standalone form which is separate. CFC’s policy is standalone, so the terrorism peril is considered in isolation. That means consistency of coverage, and a form that has been specifically created to tackle the contemporary threat of terrorism in the UK. If your policy is follow-form, you will only benefit from key business interruption extensions such as those noted above if the property form covers them too. A standalone policy gives greater peace of mind and helps ensure that your business is fully protected.
Get in touch
To find out more about CFC’s terrorism insurance, please email terrorism@cfc.com
