Incorporating Non-Damage Business Interruption Cover
The changing nature of terrorist attacks
Businesses are increasingly being indirectly impacted by terrorist incidents because police cordons and exclusion zones can hinder access and there may also be a subsequent loss of attraction, both of which can lead to a reduction in takings.
This can still be the case even when there is no physical damage to their own or surrounding property. And many businesses such as bars, restaurants and other entertainment venues have discovered that their terrorism insurance won’t always respond following malicious terrorist attacks including so-called “lone-wolf” attacks.
To meet this need, the business interruption section of our stand-alone wording includes wider cover:
- Denial of Access and Loss of Attraction are now able to be triggered by acts of terrorism that don’t result in physical damage; and
- Brand Rehabilitation Expenses have also been added.
And at the same time, we’ve also added two new extensions to the property damage cover:
- damage caused during the containment, control or suppression of an act of terrorism;
- increased costs of construction as a result of changes to building regulations.
The advantages of standalone terrorism insurance
Standalone cover could also give you a real competitive advantage by providing a flexible alternative that covers a broader range of motives: political, religious or ideological, and doesn’t rely on a formal declaration of an act of terrorism.
It is also a cost-effective solution for clients who:
- have multi-location exposures, and so can benefit from a combined material damage and business interruption floating first-loss sum insured, better reflecting their perception of the risk;
- have overseas exposures, beyond the confines of England, Scotland and Wales;
- would like to be able to choose which locations to insure and which locations to not insure, according to their perception of the risk.
In many cases, the cover offered by traditional placement routes is narrower than the terrorism exclusion in the underlying material damage and business interruption policy, whereas the cover given by the standalone wording is a better fit and can also include risks not catered for elsewhere such as individuals acting alone and sabotage.