Terrorism Cover for High Value Residential Strata
I have posted a couple of articles of late, in response to the G20 meeting that is going to be held in Brisbane shortly. I just want to give brokers and body corporate managers a gentle reminder. With commercial strata, the insurance that is arranged attracts a terrorism levy, with the levy going into the Australian Reinsurance Pool Corporation. With residential strata up to $50 million in value, the policies that I have looked at typically provide terrorism cover underwritten by the insurer issuing the policy, but not always. Sometimes it is a blanket exclusion and where the residential strata is valued at more than $50 million, there is no cover on the policies that I have read. A typical exclusion on such policies reads:
Terrorism The following exclusions apply notwithstanding any provision to the contrary within this Policy or any endorsement to it: a. Subject to b. below, this Policy excludes and does not cover death, injury, illness, loss, Damage, destruction, liability, cost or expense directly or indirectly caused by, contributed to by, resulting from or arising out of or in connection with any Act of Terrorism, as defined below, regardless of any other cause or event contributing concurrently or in any other sequence to the loss. b. Where the Total Sum Insured specified in the Schedule for Section 1 – Material Loss or Damage Insurance is $50,000,000 or less, exclusion a. above does not apply in relation to Section 1 – Material Loss or Damage Insurance only. Instead, the following exclusion will apply to that Section: This Policy will not cover death, injury, illness, loss, Damage, destruction, liability, cost or expense arising directly or indirectly out of or in any way connected with any Act of Terrorism, as defined below, arising directly or indirectly out of or in any way connected with biological, chemical, radioactive, or nuclear pollution or contamination or explosion. c. Irrespective of exclusions a. or b. above, this Policy also excludes and does not cover death, injury, illness, loss, Damage, destruction, liability, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any Act of Terrorism. [emphasis mine]
As a result of this exclusion, or where it is a blanket exclusion, it may be necessary/prudent for stand alone terrorism cover to be arranged where there is any risk of loss or damage. Those located near the Brisbane G20 venue come immediately to mind. With this sort of risk and the values at stake, my advice is as it was yesterday, seek the advice of an experienced insurance broker. Thanks to Tony Purser of AustCover in Brisbane for initiating this post by reminding me of the risk.