Fundamentals of Terrorism Insurance

As professional risk advisers our role is to identify emerging risks, discuss those with clients to allow them to make an assessment of whether they will choose to self insure or transfer that risk said Stella Pruscino from Willis Tower Watson.

Why is terror insurance something brokers should be updated about, what do most people think when they hear the term terrorism insurance?

“Most people still think property damage or business interruption, the ARPC has modelled property damage and business interruption impact yet the pool covers liability as well.” Pruscino said yesterday at the 2016 NIBA Convention.

Brokers need to realise and explain to their clients “Terrorism is persistent, long-term and global threat with a wide range of potential incidents. In the last ten years the nature of terrorism threats has changed greatly, with terrorism now causing more loss of life and economic damage than traditional property damage.”

So what should SMEs in Australia do?

Getting risk management element of any business right is the first, essential step, to manage and minimise the risk of a terrorist attack she explained.

“For Australian businesses, having a robust risk management plan addressing the terrorist threat is essential, as any adverse publicity concerning the mishandling of a security or terrorist threat or incident can have lasting reputational and financial consequences.”

Employers must take active steps to respond to the rising threat of active shooter attacks, while providing employees with clear guidance regarding what to do in the event of a terrorist incident.

“Without preparation there remains the potential for liability claims in the event the worst should happen.”

A significant incident affecting a local community is likely to have a multitude of consequences including the requirement for businesses to enact trauma response plans, review security measures, test evacuations and lockdown procedures.”