It’s tempting to leave out terrorism cover when we are considering to renew our private insurance. It might appear to be one of those extra things that you need, that might not be that essential after all. You might want to justify your actions by entertaining the thought that is no way your residence could be a target of terrorism. Unfortunately, in this time, blocks of apartments that are in the main towns or cities might be at a lower risk from a direct act of terrorism compared to a targeted individual living even in the quietest rural town. Your apartment could be affected if say a ‘dirty- bomb’ causes evacuation in a vast space. One should consider the following factors when deciding on whether to take a terrorism insurance cover.
-Does my lease require my building insurance to include a cover in terrorism activities?
-Does my lender require the protection of the building also to include terrorism cover?
-Where is my building located?
-Could my building block be a potential target?
One also needs to access the terrorism risks and also what the terrorism insurance does or does not cover.
What are risks?
A terrorist attack might damage your apartments in several ways:
1. Property damage
An attack can cause bodily harm to your building, contents in the construction including vehicles in your parking lot. The losses incurred by such attacks can be overwhelming.
2. Loss of income
If you have invested your apartments for income concerning rent from tenants, terroristic attacks might cause you to lose an enormous amount of revenue as the damages may force you to close down the apartments until repairs are done.
Anyone who is affected by the terrorist attack might file third-party lawsuits against you. For instance, a victim might allege that your ignorance to adequately secure the premises left them vulnerable to the attacks.
4. Injuries to employees
Terrorist attacks mainly employ the use of explosives such as bombs and incendiary devices. This can cause severe injuries or even death to your employees as the outcomes can be catastrophic.
When it comes to apartments and block of flats, the issue of terrorism insurance has been one of the most controversial. Insurance policies have for a long time excluded cover for war and terrorism since the first reinsurers of the insurance companies feared that losses incurred before attacks would bankrupt them. This, in turn, slowed down the economic development as construction projects couldn’t get finance from banks as owners and developers could not get terrorism insurance cover.
The decision of whether you need a terrorism insurance cover for your apartment or block of rooms is fairly a simple one: ‘Do I require terrorism insurance cover to discharge the insurance requirements of the lease?’ It would appear that for many of the apartment blocks, the answer would be a resounding ‘Yes’ which in turn means you are in need of an insurance cover for your apartment or block of apartments.
By jarmoluk from Pixabay