Insurers adapt terror cover to 'lone-wolf' styled attacks

The insurance market has developed and adapted their products to meet the evolving nature of terrorism toward unsophisticated small-cell or lone-wolf styled attacks using vehicles to ram pedestrians, small arms or knives, broker Willis Towers Watson said June 20.

While ISIS controls only a fraction of the area they once did before the establishment of the US-led coalition fighting it on the ground in the Middle East, the group is still able to inflict carnage far from its safe havens in Syria and Iraq, the broker said.

Deadly knife-wielding attacks and vehicle-ramming attacks have begun to proliferate. ISIS-inspired terrorism will likely continue to be the most damaging source of terrorism for the foreseeable future.

The insurance market has developed and adapted their products to meet the evolving nature of terrorism and violent attacks that may threaten businesses, according to Willis. Many forms of cover are specifically tailored for a wider spectrum of companies and sizes and industries as a response to trends in terrorism moving away from the highly coordinated, spectacular attacks and instead turning toward favouring smaller, guerrilla styled attacks.

Malicious acts insurance covers direct physical loss to insured properties, as well as the loss of business income and loss of attraction as a result of the malicious attack to either your property or a nearby location within a mile radius. This cover can also include crisis management costs such as security consulting and trauma counselling for an extra fee.

Insurers offering active assailant insurance have broadened their cover over the past couple years in response to the increase in violent attacks. This cover is similar to malicious acts insurance, but active assailant policies do not have a physical damage trigger. Additionally, active assailant covers events that do not necessarily pertain to terrorism; it covers random acts of violence, attacks by disgruntled employees, domestic violence attacks, etc. It also covers the damage from a wider array of weapons, including hand-held guns, knives, explosive devices worn on the body (such as a suicide vest) and even road vehicles.

Acts of violence can block employees from worksites, severely limiting operations and quickly resulting in financial loss. Impairment of access cover has been broadened to cover the consequences of strikes, riots and civil commotion, as well as the threat of an attack that forces the closure of or prevents access to/from your premises.

This product provides cover for losses incurred if an incident, threat, or even a hoax means a business cannot function normally due to the total or partial prevention of access to their premises. The policy is a stand-alone product, requiring no property damage trigger, and covers business interruption losses not only if they are caused by a terrorist event or threat, but also if they arise from a government cordon, civil unrest or a strike action, at either the company’s own or adjacent facilities within a given radius or defined route.

Security analysts are increasingly worried about a nuclear, biological, chemical, or radiological attack. The resulting damage from such an attack could be catastrophic — not only in terms of casualties but also in terms of financial loss. A recent example of this growing threat was the temporary closure of the Hamburg Airport in Germany which was forced to close, along with nearby trains/subways, due to unidentified individuals releasing pepper spray into the air conditioning system. The nuclear biological chemical radiological (NBCR) coverage not only protects clients from the physical damage of an NBCR attack but also covers the clean-up costs associated with such an attack.

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