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Terrorism Risk

Terrorism is an ever-present threat in today’s world, and it can be difficult to predict and quantify. Our risk transfer and advisory specialists help protect your interests and people at home and abroad.
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Acts of political violence and terrorism have become a reoccurring news fixture during recent years, and in a global business environment, many companies seek ways to protect their staff and corporate interests from such threats around the world.

In an increasingly uncertain world, we can help you determine your organization’s specific terrorism risk profile, using industry metrics to quantity your exposure and determine your potential losses.

Our specialized terrorism insurance brokers located throughout the world are experienced in the placement of many types of coverage, including: domestic and global terrorism and sabotage coverage; nuclear, biological, chemical, and radiological (NBCR) coverage; and general terrorism liability coverage.

Working together, we can help make your business, wherever it operates, more resilient to the ever-changing nature of terrorism risk.

Current Challenges

The rise in terrorism attacks, civil unrest and riots globally, notwithstanding losses arising from the Russia-Ukraine War, has increased the demand for standalone Terrorism and/or Political Violence Insurance policies due to limited coverage available under property programs. In Asia specifically, there has been an increasing number of terrorism attacks over the past decade namely in Thailand, Philippines and most recently Sri Lanka. Civil unrest, strikes and commotion in Hong Kong had financial implications for organisations and resulted in an increase in demand for this product to ensure protection of assets and business interruption.

Our Solution

Our political violence and terrorism facility (PVT) enables comprehensive insurance coverage and competitive premiums with market leading insurers.

This regional solution covers the following perils:

  • Sabotage and/or terrorism
  • Riots, strikes and/or civil commotion
  • Malicious damage
  • Insurrection, revolution or rebellion
  • Mutiny and/or coup d'etat
  • War and/or civil war and/or any hostile act by or against a belligerent power

Optional extensions available:

  • Business interruption
  • Delay in start-up
  • Terrorism liability
  • Active assailant

For gross written premiums exceeding US$25,000, the Marsh Asia PVT Facility provides clients with Risk Consulting Services focused on risk and security assessments that produce in-depth insights into a company’s risk exposure (subject to terms and conditions under the facility).

Benefits

  • Secure the most competitive terms from one of our four PVT Lead market-leading insurers.
  • Automatic Total Sum Insured adjustment up to 15%.
  • Broad territorial scope for both terrorism and political violence (other than sanctioned territories).
  • Sabotage and terrorism limits of up to US$500 million mitigates the need for other markets to complete a program, helping clients avoid more onerous terms and conditions or elevated pricing.
  • Faster quote turnaround times and policy issuance. 
  • Faster claims negotiations and settlement as the leader has full claims authority up to the limit of liability.

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2019 Terrorism Risk Insurance Report

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Find out more about Marsh Asia Political Violence and Terrorism (PVT) Facility

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FAQs

In the insurance context, an act of terrorism is often defined as: an act, including the use of force or violence, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organization(s), committed for political, religious, or ideological purposes, including the intention to influence any government and/or to put the public in fear for such purposes.

It is important to note that this definition can vary by region and that an incident may need to be ratified as an act of terrorism by a government official before any insurance payments and recovery can occur.

Common acts of terrorism include suicide or car bombings, mass shootings, multi-victim stabbings, and other acts intended to create an environment of fear.

Terrorism risk insurance typically provides protection against property that is damaged or destroyed – including buildings and contents such as inventory and equipment – and the resulting business interruption. Coverage can also be extended to include terrorism-related liability claims against organizations arising from loss of life and injury.

Managing terrorism risk involves the assessment and vigilant monitoring of a number of parameters.

Probabilistic modeling can help insurance brokers and companies seeking terrorism insurance coverage to have a better understanding of the risk and exposure. It helps inform a comprehensive assessment based on the likelihood of possible attacks, with additional consideration given to the level of severity.

Such modeling can help you understand your exposures and develop programs based around your unique footprint. This can include:

  • Understanding the risk accumulations/aggregation of your portfolio
  • Understanding the proximity of your insured assets to identified high profile targets
  • The type of coverage required for the region in question
  • Limits of indemnity

Probabilistic modeling with risk avoidance or preventative measures can, in turn, reduce your overall risk of loss or damage that could result in an insurance claim.