South West business urged to insure against possible Olympics terrorism (From The Wiltshire Gazette and Herald)
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South West business urged to insure against possible Olympics terrorism
10:44am Tuesday 17th July 2012 in News
With anti-aircraft missiles being deployed to protect London 2012 from aircraft used by terrorists, South West businesses are being urged to insure against the effects of possible attack.
Concerns were further raised last week when thousands of extra military personnel were called in to bolster security staff resources supplied by official supplier G4S. Police Federation members have slammed the G4S operation as “shambolic.”
With Games events also taking place outside London, it may be prudent for enterprises to consider specialist cover.
Nick Grimmitt, a regional development director for insurance brokers Jelf, whose office locations include Bristol, Bath, Swindon, Plymouth and Taunton, said: “London 2012 will attract people from all over the world; this means that the terrorist risk is one that very valid in insurance terms.
“The good news is that business can insure against terrorism.”
Following London’s Baltic Exchange IRA bomb in 1992 which killed three people, UK insurers stopped including terrorism cover on commercial policies from 1993, although home insurance policies were unaffected.
This prompted the Government and insurance industry to establish Pool Reinsurance - commonly known as Pool Re. Mainly funded by policyholder premiums, the fund is Government-guaranteed.
Mr Grimmitt said: “Pool Re will cover against terrorism, acts that cause business to lose either property or profits.
“We have many clients in London and through Pool Re and a specific terrorism policy we’d insure them against, for example, loss of office contents or profits due to terrorism.
“Terrorism is an identifiable peril that can be insured but I recommend that businesses do check their existing policies, most of which are likely to exclude terrorism.”
Insurers that participate in Pool Re offer terrorism cover as part of the relevant commercial policies they issue when their policyholders request them to do so.
Insurers in the Pool Re scheme are free to decide the price of the terrorism cover they offer their customers. As a result, different insurers may give different quotes.
Although it is open to each insurer to determine the price it charges, the most important factors tend to be the total value of the property, its location and whether the policy is to cover property damage only, or also business interruption losses.
Each insurer must pay losses up to a threshold, which is determined individually for that insurer. When losses exceed that threshold, the insurer can claim upon reserves accumulated by the insurance industry on a mutual basis within Pool Re.
Should terrorism claims exceed these reserves, Pool Re can, in turn, draw funds from government to enable it to meet its obligations in full, regardless of the scale of losses.
The Games were hit by terrorism in 1972 when the Munich Olympics massacre saw 11 Israeli athletes and trainers killed in an operation by the Palestinian Black September organisation.
More recent acts, most notably by al-Qaeda, have put governments on alert around the world.
Security agencies have been carrying out exercises ahead of the 2012 Games.
One security official is reported to have said that the Olympic Stadium would be the "most sensitive terrorist target in the world" over the coming weeks.
In May, a large-scale exercise to test Britain's military capability ahead of the Olympics got under way.
It was announced that a helicopter task-force was on board the Royal Navy's largest warship, HMS Ocean, to prepare for their role in defending London against any potential terror attack during the Games.
In June a terrorist suspect was arrested for breaching legal curbs on his movements after he travelled through the Olympic Park site in east London.
The 24-year-old was charged with five separate breaches of an order banning him from using the train route which passes through the area.