GlobeSt.com UPDATE: UK Gov't. Has Insurance Protections in Place

(To read more on property protection, click here.)

LONDON-The terrorist attacks that blasted London yesterday appear to have had a limited effect on commercial properties. The death toll has risen to 37 and the injured number in excess of 700, and most of these were incurred underground. Attempts to assess the scale of the structural damage to tunnels are being delayed while forensic evidence is being collected.

The location of the blasts underground has limited the effects of commercial-property losses. A statement by the Association of Insurance and Risk Managers says that while the attacks were a terrorist event, in terms of loss of commercial property, “this is not a 9/11 situation.”

An insurance industry insider adds that this is “not like IRA attacks. Those were clearly aimed at property. Yesterday’s attacks were intended to kill and maim as many people as possible.”

He also notes that the UK’s experiences of the IRA campaign means that the property-insurance market is well placed to address any losses. The UK has one of the “longest standing terrorist insurance mechanisms in the world,” in the form of Pool Re, a government-backed anti-terrorist reinsurer set up in 1993 to cover business and commercial property in the event of IRA terrorist attacks. Pool Re provides protection above the level of euro 109.46 million ($130.3 million), and one insurance insider predicts that yesterday’s attacks are unlikely to exceed that. He added that property losses from the terrorist bombings that killed around 200 people in Madrid in 2004 fell well short of this figure.

The Association of British Insurers is advising policyholders to review their policies on terrorist coverage. A spokesperson for the ABI added that the industry was not “yet in a position to estimate the scale of damage to property and the human loss.”