How Should You Be Insuring Against Lone-Attacker Events?

The UK's intelligence services are facing an "intense" challenge from terrorism, the head of MI5 recently said, adding that terrorist activity has become more frequent than ever before, making it increasingly difficult for those looking to counter them.

The attacks occurring this year have been what are known as “lone attacker” events. Several of these attacks have taken place in the UK since our last update in May, including:

• Manchester Arena, 22 May, bomb detonated at a concert.
• Finsbury Park, 19 June, vehicles driven into pedestrians.
• London Bridge and Borough Market, 3 June, vehicle driven into pedestrians on London Bridge, knife attack in Borough Market.
• Parsons Green, 15 September, bomb planted on tube train partially detonates.

These, combined with the vehicle attack on Westminster Bridge in March, have resulted in five terrorism attacks in the UK this year, with three attackers using vehicles as weapons and two involving explosives and hand weapons.  Elsewhere in Europe since May, a vehicle attack in Barcelona and knife attack in Finland in August adds to the lone attacker events this year.

While, for the most part, these events caused limited property damage, the risk to employees remains a key concern. In addition, if a business is located in the immediate vicinity, it could face business interruption costs while investigations into the attack are ongoing.  For example, several businesses were located in the areas cordoned off immediately following the London Bridge/Borough Market attack.

Organisations may also face additional costs in the wake of an attack from implementing additional security measures, counselling, and public relations.

Insurance Market Develops New Covers for Lone-attacker Events

Given this risk, the insurance market has responded by offering new policies and wording relating specifically to lone attacker events. 

In recent months, we have seen insurers developing new wordings and covers for these events. Many insurers define a lone attacker event as one involving a hand-held weapon, including knives, guns, and explosive devices.  As many recent attacks, such as those occurring in Barcelona and London Bridge, have involved the use of a vehicle, some insurers are now expanding their definition to include a vehicle as a hand-held weapon.

Some insurers are also expanding cover to include the additional costs mentioned above.

• Carefully consider the changes in risk and the options available for insuring them.
• Review how these risks are covered under your insurance policies.
• Work with your broker to tailor your terrorism insurance to address gaps in cover and emerging risks.
• Develop/review business continuity and emergency response plans to ensure you are prepared against this rising threat.

Now is the time to check your policies to make sure you are covered for these evolving risks and look into expanding cover as necessary.