Insurer Hiscox has revealed it has seen a sharp rise in demand for terror insurance from small companies since the start of the war in Iraq.
The remarks came as the 120-day "bedding-in period" of the US terrorism backstop, Terrorism Risk Insurance Act (TRIA), came to an end.
TRIA means the US government covers the insurance industry's losses arising from a terror attack, which leads to claims above $10 billion (£6.3bn).
Hiscox added that inquiries about terror insurance have increased "five-fold" during the run-up to the war in Iraq.
However it warned that the picture on who is buying terror insurance is unclear. It suggested that only companies that see themselves as high risk are buying terror insurance.
Hiscox terrorism underwriter Stephen Ashwell said: "There is a lot of uncertainty in the market.
"Many companies are experiencing difficulties getting the cover they need and are assuming there is no capacity as the prices are so volatile."
