As you know as a company Trident Insurance do not give advice, simply because we can’t be sure we will be 100% correct when we do give it. With all the policies available from different Insurers, it would be a fool who pretended to be knowledgeable of all policy exemptions and exclusions within the system not forgetting addendums.  

Therefore as a company we choose to inform, and whilst that may be a subtle difference, it is a far more honest position to hold. What we do have however, are years of internal experience which whilst not making us specialists, ensures we ask the right questions on your behalf.

It dawned on me that with the terrorism alert at almost the highest level, it’s been strange inquiries for terrorism cover have been so low. 

Yes, there are inquiries for cyber insurance with hacking becoming a real problem and all too regularly reported; and yes there are new products being offered all the time in that area. But for all the hype, to secure reliable cover the insured party needs to have almost Fort Knox security in place. A position that is nigh on impossible to be in, regardless of IT assurances to the contrary. It really pays to remember that if a human designed it, a human will break it. Crude that may be, but unfortunately true regardless. 

With terrorism insurance there is cover available for commercial premises but the full cost is passed onto the UK Government. The reason being that after the Baltic Exchange bombing in 1992, terrorism cover from all commercial policies was removed and covered by Pool Re. which is in effect a government agency.  

The problem for Insurance companies is that whilst a terrorist attack may be very infrequent, the damages are unknown and technically unquantifiable until after the event, and for sure would certainly be huge, with the only party who had deep enough pockets being the government.

Then there is the issue of establishing whether an explosion was not generated by a business owner who was desperate and only government agencies have that kind of knowledge to verify. 

People do forget that whilst Insurance companies take in and pay out £billions each year, they are commercial concerns and not social services. How are they to put aside an unquantifiable amount in reserve for a terrorist attack/s that may not happen?

Moving on to household insurance, there is no terrorism cover, as no insurance premiums are passed on to Pool Re for that area. So the vast amount of household products will exclude acts of terrorism in totality. Some will only exclude terrorism by ‘dirty’ means ie. radiological, biological or chemical attacks.

Why not the whole gamut of possibilities? Well the perceived view is that terrorism would objectively be directed at likely targets ie. Politicians, high profile individuals, embassies and diplomats on the human front, and all the associated buildings on the other, and not the domestic premises we live in. 

It would appear that Acts of War do not require an official declaration of war to be in place, but the events need to have been instigated by a nation on another nation. 

Terrorists may claim a cause is their guiding reason for action but not for or on behalf of their own government or nation state. 

Yes for sure we can be cynical on that but it’s the understanding and there’s little point in arguing the toss.  

Finally of course, Acts of War, it must not be forgotten are excluded from all policies. 

I’m sorry I can’t find anything enthusiastic to say on this area, as it’s a grotesque issue to think about let alone try to write on, but I do hope it has been in some degree informative and thought provoking.