UK terrorism backstop Pool Re is reviewing its non-damage business interruption (NDBI) offering following changes in the commercial insurance market post Covid-19, its chief underwriting officer, Stephen Coates, told Commercial Risk Europe.
Pool Re extended cover in 2019 to include NDBI losses triggered by a terrorist attack, made possible by an amendment to the Counter-Terrorism and Border Security Bill 2018. It was the first terrorism pool in the world to extend its cover to include NDBI, denial of access and loss of attraction losses.
Before the law was changed, Pool Re could only reinsure losses if a company’s premises had been physically damaged by terrorists. The change followed a number of small yet disruptive terrorist attacks, including the 2017 London Bridge and Manchester attacks, which affected businesses caught behind police cordons or experiencing a reduction in footfall following the events.
The optional NDBI extension provides cover for losses incurred if a business cannot trade or is prevented from accessing its premises in the wake of a terrorist attack.
Pool Re’s NDBI cover is only currently available as an extension to commercial cover for NDBI incidents, but this market that has become more restrictive with Covid-19, explained Coates. The pandemic has generated significant business interruption losses for property insurers, and promoted insurers to exclude Covid-19 and infectious disease cover.
So Pool Re is considering ways to ensure UK business take out NDBI cover if the market continues to hold it back.
“In 2019 we launched terrorism non-damage business interruption cover, but since then Covid-19 has affected the ability for companies to buy standalone NDBI, which are marketed together. We are now exploring whether we should change the way we offer terrorism NDBI cover. This is something we are thinking about at the moment, so dialogue with our members on this issue is something we will need to do very shortly,” said Coates.
Pool Re would have to consult with its members over any possible changes to NDBI and gain government approval, he added.