Of all the types of insurance, terrorism may be the one that is top of people’s minds given recent events in the news.
The tragic events in Christchurch, New Zealand, mean that many businesses may be approaching brokers inquiring about their options, and the topic needs to be handled with expertise and care.
Geoff Stilwell, CEO and managing director of Beech Underwriting, said that whenever there is a terrorist attack there is an increase in enquiries to Beech, from both new and existing customers.
“If there’s an incident there’s always a spike in the enquiries,” Stilwell explained. “You get it for two or three weeks while it’s in the front of the brain and it’s in the forefront of news. Once it disappears then it just falls flat through the floor.”
This was, he said, the case following attacks in the UK such as at Borough Street Market or Finsbury Park, both in 2017.
Usually, the CEO said, terrorism insurance is difficult to sell to people, even though he believes it is very important.
Part of the reason it is a difficult sell, according to Stilwell, is because brokers are not educated enough about terrorism insurance and therefore can’t actually educate their clients about what the product could do for them.
“The problem is this - terrorism is an incredibly hard sell,” Stilwell said. “There’s so many brokers who just do not understand the basics of terrorism cover, they really don’t, so it’s really difficult for them to get the basics over to their client.”
Stilwell has done a number of things to try and educate brokers on the topic, including producing communications products that help inform brokers on the subject.
One particularly thorny area for many brokers is understanding the difference between the terrorism insurance that Beech Underwriting offers, and the products Pool Re offers, which can vary greatly.
“I’ve done number of memos to brokers just purely trying to help them understand the ramifications for the client,” Stilwell explained. “It surprises me how many brokers out there really do not understand the difference between a Pool Re policy and our policy, or what the criteria is.”
Beech Underwriting also does a lot of work to try and educate clients directly, Stilwell said. This especially applies to aspects of terrorism cover like non-damage denial of access.
“When we send out our renewals on all our commercials, we offer non-damage denial of access, always,” according to Stilwell. “Every commercial risk we do has that offered.
“It’s from £50 up and people say: ‘oh no I can’t afford it’. But would they rather spend £50 and know they can pay the bills for a week, or two weeks or three weeks, or not? It’s a false economy.”
Non-damage denial of access is going to be something Stilwell believes will only become more important as a type of cover as time goes on.
“Non damage denial of access is going to be a major factor - we’ve been offering it for years, but very few people took it up,” he said. “And really it’s only come about because of what happened at Borough Market.
“Anybody who runs a pub, a nightclub, a hotel, anything that’s in the centre of a town, should have non-damage denial of access. They may think it’s not worth buying, but for the sake of £50 or £100, it’s a no brainer to be honest.”
It’s not just hospitality businesses who use the cover either. Any commercial business that would be impacted by not being able to trade, be it for one week to a month, can get the cover.
“We insure a very large distribution centre and we provide non-damage denial of access for them,” he said. “Because quite simply if they cannot move their stock from their distribution point then all their shops are in trouble. And that’s the key.”