Terrorism Cover

What is Terrorism Cover?

Terrorism cover protects an insured person or business against certain financial losses resulting from an event that qualifies as terrorism under the policy.

Depending on the insurance type, it may cover:

• Damage to buildings and property
• Damage to machinery, equipment, and stock
• Business interruption losses
• Certain medical expenses
• Accidental death or disability
• Certain travel-related expenses

The exact coverage depends on the policy wording. An event described as terrorism in the news does not automatically mean it will qualify as an insured terrorism event.

How does terrorism cover work?

The typical claim process involves:

1. A terrorism-related incident occurs.
2. The insured informs the insurer as soon as possible.
3. Relevant authorities are notified where required.
4. The insurer determines whether the event falls within the policy's definition of terrorism.
5. The damage and financial loss are assessed.
6. Applicable exclusions, deductibles, and limits are applied.
7. The eligible claim amount is settled.

What does terrorism cover include?

Property Damage

Depending on the policy, terrorism cover may protect insured:

• Buildings
• Office premises
• Machinery
• Equipment
• Furniture and fixtures
• Stock and inventory

Business Interruption

If an insured terrorism event causes physical damage and disrupts operations, business interruption coverage may help cover eligible financial losses such as lost profits or continuing expenses. However, business interruption coverage depends on the specific policy and should not be assumed to apply automatically.

Travel Insurance

Travel insurance may provide certain benefits following a terrorism-related incident, such as:

• Emergency medical treatment
• Evacuation
• Trip cancellation
• Trip interruption
• Travel assistance

Coverage varies significantly between policies, and terrorism may also be specifically excluded.

Group Personal Accident and Group Term Life Insurance

Personal accident or life policies may provide benefits for accidental death or disability following a terrorism-related event, depending on their exclusions and terms.

Is terrorism cover included in standard insurance?

Not always. Coverage depends on the:

• Type of insurance
• Insurer
• Policy wording
• Coverage selected
• Applicable exclusions
• Policy limits
• Geographical scope

Some policies include terrorism protection, while others may exclude it or offer it as an additional coverage. Always check the policy schedule and full policy wording rather than relying only on the product brochure.

Common Exclusions

Depending on the policy, exclusions may include:

• War and war-like events
• Civil war or rebellion
• Nuclear, chemical, biological, or radiological risks
• Losses outside the policy's geographical scope
• Uninsured property
• Losses exceeding the policy limit

A deductible may also apply, meaning the insured has to bear a specified portion of the loss.

How to check if your policy has terrorism cover

Before buying or renewing insurance, check:

1. Policy schedule – Look for terrorism coverage or exclusions.
2. Terrorism clause – Understand how the policy defines terrorism.
3. Exclusions – Check which events aren't covered.
4. Coverage limit – Confirm whether a separate sub-limit applies.
5. Deductible – Understand how much you would have to pay yourself.
6. Business interruption coverage – Check whether terrorism-related interruption is covered.
7. Geographical coverage – Verify which locations are protected.

If the wording is unclear, ask the insurer or broker for written clarification.

How to file a terrorism insurance claim

If a covered event occurs:

1. Prioritize employee and public safety.
2. Notify the relevant authorities where required.
3. Inform the insurer or broker promptly.
4. Document the damage with photographs and videos where safe.
5. Preserve relevant records and damaged-property evidence.
6. Submit the claim form and supporting documents.
7. Cooperate with the insurer's surveyor or investigator.
8. Track the claim until settlement or rejection.

Common Claim Documents

Why is terrorism cover important for businesses?

Terrorism can create losses beyond immediate property damage. Businesses may also face operational disruption and financial losses.

Terrorism cover can help businesses:

• Protect valuable physical assets
• Manage eligible business interruption losses
• Reduce the financial impact of catastrophic events
• Protect operations across multiple locations
• Strengthen overall risk-management planning

Businesses should assess terrorism exposure alongside property insurance and business interruption insurance.

Get the right insurance cover for your business

Protect your business against unexpected risks with the right insurance coverage. Talk to Pazcare experts to understand your coverage options, compare policies, and choose protection that fits your business needs.

Explore your insurance options with Pazcare today.