As rescue workers continue to search for the dead and missing, and London begins the long slow process of recovery from yesterday’s devastating bomb blasts that killed at least 37 people and injured over 700, the Association of British Insurers (ABI) has issued a statement promising that “insurance companies will deal with any claims as quickly and sympathetically as possible.”
Stephen Haddrill, Director General of the ABI, stated: “The insurance industry will do the best possible job over the next few days and weeks following these shocking events. We are not yet in a position to estimate the scale of damage to property and the human loss. Many policies provide terrorism cover. Anyone affected should check their policy and contact their insurance company or broker.”
The ABI listed what coverages and conditions could be expected in various lines of insurance, as follows:
— Property insurance: Business – Terrorism cover is available to businesses as an optional add-on to their commercial insurance policy. Property damage caused by explosion, as well as chemical, biological and nuclear contamination is covered in this way. Business interruption insurance is also available as an option to cover consequential losses such as the cost of alternative premises, following any damage. In some cases, ‘denial of access’ cover may cover trading losses if firms are unable to open their businesses due to areas being officially cordoned off. Policyholders should check their policy cover. Many insurers offer practical advice to businesses, as well as advising on cover.
— Household: Buildings and contents policies cover damage caused by explosion, fire or impact as a result of terrorism. Nuclear, chemical or biological attack is not normally covered.
— Life insurance: Life insurance policies normally cover claims following explosions, including terrorist acts.
— Health insurance: Policies covering critical illness and or income protection do not usually, but in some cases may, cover claims arising from terrorism.
— Motor Insurance: Most comprehensive insurance will cover the cost of repair or replacement of a vehicle damaged as a result of terrorism. Third party fire and theft usually covers any fire damage.
— Travel insurance: Travel insurance normally covers medical expenses and personal accident claims, even if the policy has a general terrorism exclusion clause.
Some policies cover missed departures as a result of transport difficulties.
The ABI added that “in all cases where the policyholder has suffered loss they should first check their policy and then talk to their insurer or broker.”
Several individual companies have indicated what effects, if any, they are expecting from the attacks. Munich Re said that, as it is not a member of Pool Re (see following article), it would have little or no exposure. Australia’s QBE Insurance Group Ltd., the second largest underwriting group at Lloyd’s said its losses were not expected to be excessive and would be well within its range of expectations. Lloyd’s is still assessing the impact.
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