Only one in five UK businesses have a terrorism insurance policy in place, leaving them at risk of permanent financial loss in the event of a terrorist attack in their community.
New research by ComRes, commissioned by Pool Re, has laid bare the limited take-up of terrorism insurance policies and widespread lack of terrorist attack contingency planning amongst UK businesses, particularly SMEs. The findings include:
· Only 19% of UK businesses have a terrorism insurance policy in place
· 81% of businesses either don’t have a policy in place or don’t know if they do or not
· SMEs have even lower coverage (15%) than the UK as a whole, and can be disproportionately affected financially by acts of terrorism
In response to the findings, Pool Re have launched a compact guide for business owners. Titled ‘It’ll never happen here’ the guide explains why businesses need to think about insuring themselves against property damage and business interruption resulting from a terrorist attack.
The ComRes research also outlines that a low proportion of businesses have contingency planning in place if their business is forced to close in the aftermath of a terrorist attack: of those surveyed, only 25% had plans in place and some 65% did not.
The recently passed Counter-Terrorism and Border Security Act allows Pool Re to cover losses incurred if a business cannot trade or is prevented from accessing its premises in the wake of a terrorist attack. However, unless businesses actually take the step to purchase terrorism insurance, they remain at risk of financial loss.
The challenge around increasing uptake is in educating UK businesses about the importance and availability of terrorism insurance policies. Respondents to the ComRes survey say the biggest barriers to purchasing this kind of terrorism insurance policy are that the chances of it being claimed upon are very small (33%), they did not know they could buy a terrorism insurance policy (25%) and they expect that their existing insurance would cover losses in the event of a terrorist attack (20%).
Commenting, Julian Enoizi, Pool Re Chief Executive, said:
“These figures demonstrate the knowledge gap on terrorism insurance that UK businesses must address to ensure we are as resilient as possible to the secondary effects of terrorism.
“The compact guide for business owners that Pool Re publishes today is a key part of closing this gap, and we will also be embarking on a collaboration programme with business federations, local authorities, brokers and insurers.
“We aim to promote the broadest possible take up of terrorism insurance policies, and thus help UK businesses be better protected from damage to their business should the worst happen.”