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Terrorism Insurance is something common to most of the countries these days. For the general public, it is something that happens to other people and other places even here in the Philippines. Now, there is a growing sense of consciousness among the people that terrorism is not a short phase or trend. Terrorism is something we all should be aware of and must prepare ourselves to counterterrorism contingency plans. The business community also realizes that threat that's why they must do more to protect their establishments, offices, institutions and their employees from any act of terrorism.
Terrorism, insurance, and your block
You probably hear a lot about terrorism insurance and may be confused over whether or not it is mandatory. At the end of the day, the answer is almost a yes, but you should be open to considering it.
Take a look at the definition of terrorism and it may sound as if this is something that can never apply to your home. It can be enticing for a management company director, when considering the continuation of their buildings insurance, to decline terrorism cover.
It may seem to be one of those extra costs that you could do without. After all, how could your block be at grave risk of being singled out for a terrorist attack? It’s not that simple, though.
Here are a few things to think about:
• The lease may make it a requirement. Older, pre-1990s leases may not mention it specifically, but if there is generally a requirement for full or comprehensive property insurance they could expect it to be covered. The obligation to have comprehensive cover could, by definition, mean protection from the risks of an explosion caused by terrorists. This is a matter that has been tested in law in what is known as the Q-Dime case.
• The building may not be a target but residents could be endangered and at risk; even worse they could be the terrorists themselves. Bomb factories in blocks of flats are not unknown.
• Individual leaseholders’ mortgages, as lenders may insist on it.
So if we have to have it, why is this cover not included as standard?
England and Wales have a long history of terrorism. The UK recorded the biggest economic loss from terrorism among all the countries in the EU between 2004 and 2016, according to new data, with attacks costing the country an estimated £38.3bn in GDP growth during that period.
Losses can be massive and special preparations have been made for commercial property to ensure that high-value claims can be met. This is relevant to blocks of flats because, while a general household policy normally includes this cover automatically, a block of flats is treated as a commercial insurance risk meaning terrorism cover is excluded and must be added as additional cover.
Older people among us will remember what seemed to be the relentless IRA campaign in the 1970s. Indeed, it was the IRA bombing of the Baltic Exchange in 1992 that precipitated changes in the insurance market, which was facing a massive deficit and needed to ensure that it could meet its obligations.
What is Pool Re?
The answer that insurers and the Lloyd’s Syndicates found was to set up the Pool Reinsurance Company Limited, also known as Pool Re, to share the risks. Membership of the scheme gives them the support to help cover losses resulting from acts of terrorism, regardless of the scale of the claims. Without such a set-up, many buildings would be unable to get insurance against losses caused by a terrorist attack. Ultimately, if they were unable to meet their obligations due to large losses which exhausted their reserves, they would draw funds from the UK Government.
At Deacon we offer a choice of competitive policies; one of which offers broader cover to include attacks on individuals in the block if, say, you have prominent figures living in the block for example.
We will discuss your individual needs and recommend an appropriate cover for you. There is no extra administration for you as the insurers require only the Statement of Facts for the Blocks of Flats policy, which we already hold for existing customers.
Even though you may have read that insurers often pay smaller claims themselves due to the way payments to the reinsurer are structured, and think any claim you make is unlikely to reach the threshold at which Pool Re pays out, you could still need specialist cover in place. Otherwise, damage resulting from explosions caused by terrorism may not be covered at all.
History of terrorism
The term terrorist is believed to have originated during the Reign of Terror (September 5, 1793 – July 28, 1794) in France. It was a period of eleven months during the French Revolution when the ruling Jacobins employed violence, including mass executions by guillotine, in order to intimidate the regime's enemies and compel obedience to the state. Some people argue that as it was action by the state, not against it, this was not terrorism – albeit undoubtedly utterly terrifying for anyone living in France at the time.
Other people cite the Gunpowder Plot of 1605 as the first attempt at a terrorist attack. The conspirators intended to kill King James I and the members of both houses of Parliament, and then restore the Catholic faith to England.
Or maybe the roots of terrorism date back to the 1st century and the Sicarii Zealots, Jews who opposed the Roman occupation of Judea; the 11th century and the Al-Hashshashin, the Islamic sect from whose name the word assassin comes; or the 19th century and the Irish Fenian Brotherhood and Russian Narodnaya Volya?
Certainly, the 19th Century conspirators would have benefitted from the development of powerful, stable, and affordable explosives, including dynamite in 1837, and levels of globalization that helped radical ideas to spread quickly and grow in influence.
Who protects us?
Police
Counter-Terrorism Policing is now an alliance of UK police forces working closely with security and intelligence agencies to prevent, deter and investigate terrorist activity. It is accountable to the National Police Chiefs’ Council (NPCC) Counter Terrorism Coordination Committee (CTCC) and works tirelessly to protect the public and our national security.
The first police unit to combat terrorism was established in 1883 by the Metropolitan Police, initially as a small section of the Criminal Investigation Department. It was originally known as the Special Irish Branch, unit's name was changed to Special Branch as its remit steadily widened over the years. In the early years of the 21st century, it merged with Scotland Yard, where heading up the counter-terrorism branch is considered to be the toughest job in British policing.
Secret services
At the end of the Second World War, there were a total of 17 MI (Military Intelligence) sections in the War Office. Today, just three organizations make up the British secret services.
MI5 is responsible for countering covertly organized threats to the UK, and its principal activity is the fight against terrorism, both international and homegrown. It began life as the Secret Service Bureau in 1909 to counter Imperial Germany’s espionage operations in the build-up to the First World War. Between the two world wars, the service was increasingly concerned with espionage threats from the far right (fascism) and the far left (communism). During World War II, MI5 had success uncovering enemy agents and feeding misinformation to the enemy, notably helping the allied landing in Normandy in 1944. Since the fall of the Iron Curtain, MI5 has been predominantly concerned with Northern Ireland and international terrorism.
MI6, officially known as the Secret Intelligence Service, operates worldwide to collect secret foreign intelligence in support of the British Government's policies and objectives. It commonly deals with challenges such as regional instability, terrorism, the proliferation of weapons of mass destruction and illegal narcotics. The head of MI6 is known ‘C’ after its first chief, Sir Mansfield Cummings. Due to the sensitive nature its work, MI6 has traditionally been shrouded in secrecy, and little was known about the service, other than the fictional exploits of 007. It is widely accepted that a man like James Bond would not be hired by MI6 these days.
GCHQ, the Government Communications Headquarters’, eavesdrops on communications throughout the world, and it is possibly the most secretive of all the intelligence agencies. Its headquarters are in Cheltenham, Gloucestershire; although it was famously based at Bletchley Park during the Second World War.
Cracking the Enigma code in 1940 possibly prevented the collapse of British resistance due to starvation, as German U-Boats were decimating Atlantic convoys. Another major wartime achievement was the design, installation, and operation of the world’s first electronic computer, COLOSSUS.
How and Where to Buy Terrorism Insurance?
You can buy a terrorism insurance policy from most insurance companies. They are able to sell you coverage for terrorism insurance if you feel you need it or are required to purchase it for yourself, your work or for your company.
Insurance companies can offer terrorism insurance either as a stand-alone policy or part of a coverage plan. You can check out an insurance company like Deacon Insurance to learn more about the options available for a terrorism insurance coverage. If you want to familiarize yourself more with terrorism insurance and its cover, feel free to research and discuss with your insurance agent.
