Salisbury spy poisoning exposes insurance gap around chemical and biological attacks
The head of Pool Re, the government-backed terrorism reinsurance pool, has called for a debate on the insurance industry’s reaction to chemical, biological, radiological and nuclear (CBRN) incidents following the attack on former spy Sergei Skripal and his daughter Yulia in Salisbury last month.
A report published today by Pool Re highlighted the risk to companies from CBRN attacks which are not typically covered by insurance policies as the expected losses from such incidents was thought to be prohibitively large.
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A number of businesses are still closed in Salisbury including the Zizzi Restaurant and the Mill Pub visited by the Skripals on the day of the 4 March attack.
There are also suggestions that Salisbury has been hit by a reduction in visitor numbers, with footfall to Salisbury Cathedral dropping by 40 per cent in the week after the nerve agent attack.
A month on the cathedral had experienced a visitor reduction rate of 20 per cent and a 24 per cent reduction in income.
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Chief executive of Pool Re Julian Enoizi said: “The losses being incurred by small businesses in Salisbury are highly unusual. CBRN has historically been excluded from all commercial property and business interruption insurance policies as it was thought that the sheer magnitude of the potential losses would exceed the ability of insurance and reinsurance companies to meet claims. However, the disturbing event in Salisbury shows that these types of attack can be localised and could be deployed by criminal or terrorist actors.”
Enoizi called for debate within the insurance industry over how such incidents should be covered.
“Consideration should be given to whether the perceived wisdom around certain perils needs to be reassessed, and whether now is the time to address other risks, for which underwriters also do not provide cover,” he said.
The move follows controversy over the lack of cover for market traders affected by the London Bridge attack in June 2017.
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Hundreds of restaurants, traders and other businesses suffered huge financial losses after police cordoned off Borough Market and surrounding areas for 11 days in the wake of the attack.
Many firms were unable to recoup losses from insurers after being told losses are only covered for physical damage rather than business interruption.
Speaking at the time Enoizi said: “We need to amend the cover to cover this situation.”
Pool Re was set up by the government in 1993 in the wake of a spate of terrorist attacks including the Baltic Exchange bombing 1992 and the Bishopsgate bombing in 1993.