Rod Kitchen highlights some of the scenarios that could occur

The insurance industry's claims departments have a long experience in dealing with weather-related catastrophes. As soon as events such as storms or floods occur a well oiled machine springs into action to ensure call centres are manned, policy covers identified, loss-adjusters appointed and supply chains alerted.

The industry also has experience of terrorist attacks using conventional explosives, such as the Manchester bomb in 1996, but is it as prepared for the problems we could face from a terrorist attack using chemical, biological radiological or nuclear (CBRN) weapons?

A terror attack on London is inevitable, says Metropolitan Police Commissioner Sir John Stevens. His comments were echoed by Mayor of London Ken Livingstone, who says it would be "miraculous" if London escaped attack. Cabinet Minister Peter Hain says the UK is a " frontline target" for attack by international terrorists.

While they are not necessarily envisaging a CBRN attack, the possibility and potentially devastating nature of such an event cannot be ignored by any well-organised claims operation. Potential scenarios include the following:

  • Chemicals in gas or liquid form primarily targeted at people and most lethal in closed spaces. For example the Sarin attack on the Tokyo subway in 1995
  • Biological (viruses, bacteria or toxins), primarily targeting people, but which can contaminate buildings. An example here is the anthrax attack on the Brentwood Post Office in the US in 2001)
  • Radiological contamination, which could be deployed by the so-called "dirty bomb", where radioactive material is dispersed into a wide area using a conventional explosive. Thankfully not yet used, but which could render large areas uninhabitable for a considerable period of time
  • And lastly, of course, the potential for a small nuclear weapon with its near total destruction over perhaps an area two miles in diameter. It is fair to say though, that this choice of weapon is the most unlikely, simply because it would be difficult for any terror group to develop.
  • Catastrophes, yes, but unlike any we have seen before with some very different challenges:

  • Chemicals may be relatively easy to find and isolate but difficult to destroy and can generate toxic waste by-products
  • Biological substances are sometimes easy to destroy but difficult to find and it will be hard to be certain they are fully removed from affected property
  • Radiation is easy to find but impossible to destroy
  • Finally, we must not underestimate the human element affecting both employees and the general public. Fear and shock factors including reluctance to re-enter buildings or locations as well as actual injuries will need to be mitigated against.
  • The Home Office website ( provides a range of useful information on the terrorism threat and the government response. In addition, a link to the UK Resilience site ( provides up-to-date news and guidance as well as a range of other useful links. Pool Re is also active in examining insurer plans for terrorist responses and a close partnership is important.

    All this means that claims directors need to ensure they have specific plans to deal with all terrorist attacks, including CBRN. These must be robust enough to cater for a variety of scenarios, for example:

  • Multiple scenes of loss
  • Exposure of key personnel or locations
  • Travel and communications severely curtailed
  • Specialist cleaning and restoration work involved with limited expertise available in the UK
  • Contamination that leads to buildings being unusable in the future and declared total losses
  • Cost of rectification and a policyholder's exposure possibly greatly exceeding their sums insured
  • False alarms (talcum powder instead of anthrax) leading to losses for affected insured.
  • As insurers review their catastrophe response plans, it is also important that opportunities for collaboration across the industry are not overlooked. it

    ' Rod Kitchen is claims director at Royal & SunAlliance