FEATURES
SECTOR FOCUS: TERRORISM COVER
A FEAR NOT GOING AWAY 10
The number of attacks involving PBiEDs or suicide bombings in Europe from August to December 2016.
$17bn
The market for consumer drones by 2020 – an emerging threat source.
816
Individuals reported to Europol for terrorism-related offences from August to December 2016. Source: Pool Re Terrorism Threat & Mitigation Report Aug-Dec 2016.
“The banks are becoming very terrorism proactive because if they are lending a lot of money for a property they are looking to make sure that they have terrorism covered.” Stilwell explains that any business that has a mortgage, a loan or an overdraft will need terrorism cover because if an incident does occur, the banks will still continue to demand their money. Without terrorism cover, servicing these loans is going to be highly difficult – and so if something happens the broker can be the saviour by having provided the protection that allows the business to continue trading. “For anybody who is involved in property owners’ insurance where they have lots of flats or a housing estate, terrorism cover is a must,”
cover emergency accommodation for tenants after an incident takes place – whereas Beech Underwriting, which has all of its terrorism policies 100% underwritten by Lloyd’s, includes emergency accommodation not only for those displaced, but for their pets, too. In particular, however, Stilwell believes that brokers need to consider whether or not their commercial client has operations – or intends to have operations – beyond the UK mainland, because the bulk of policies in the UK won’t offer cover in these regions. “What many people don’t realise is that a lot of these cover options don’t cover the Channel Islands, the Isle of Man, Northern Ireland or Eire,” he explains. “They are
“For brokers, there is a simple question to ask: ‘Do you have a mortgage on your commercial business?’ It’s as simple as that” Geoff Stilwell, CEO and MD of Beech Underwriting Agencies he says. “As far as a mortgage company is concerned, if there is an incident they are still going to want to be paid. So anyone who has a mortgage or lease in an apartment block should make sure that the block has terrorism cover.” He added: “For brokers, there is a simple question to ask: ‘Do you have a mortgage on your commercial business? Do you have any loans from the bank or any bank overdraft?’ If they do, then they should be buying terrorism cover – it’s as simple as that.”
What should be covered? Stilwell highlights that brokers shouldn’t assume that one size fits all for their clients when it comes to providing appropriate cover. For example, many policies will not
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often purely mainland UK only. “What we can offer to businesses that, for example, have manufacturing facilities overseas but have warehouses or distribution centres here, is that we can insure the manufacturing facility overseas, the product, and the depots where all these things are stored, as well as their operations at home.” Stilwell, who has been writing terrorism insurance with Beech Underwriting for 16 years, believes that many companies have overlooked the need for cover beyond the UK mainland, adding that his firm is doing business in “Italy, Germany, Austria and Hungary.” “For example you have a hotel chain and you decide to open up a property overseas – we can cover that and others can’t,” he says.