A rather significant change takes place from 1 January 2003, which has received very little publicity.

Commercial property and business interruption policies renewable on or after 1 January will have the £100,000 heads of cover for buildings, contents and business interruption removed.

The policy will exclude terrorism (as defined by the insurer) completely. The client will be able to buy back terrorism (as defined by Pool Re) cover at extra cost.

Unfortunately, the two definitions of terrorism are quite different, so that fire caused by a posse of anti-capitalist protestors could easily be deemed terrorism by the insurer and would, therefore, be excluded. Pool Re's definition would be unlikely to deem this to be terrorism, so even with the terrorism buy-back, no cover.

Our burnt-out clients would then be turning to us to check whether they had been made aware of all the correct facts and options, and if not, watch out PI insurers.

Obviously all commercial clients from the smallest shop upwards will need to be made aware of these fairly complex issues.

I spent nearly a day compiling a letter to all clients to attach to all renewals from 1 January. I had no help from insurers or Biba, did you?

Adrian Sutton
Douglas Insurance Rugby

Send letters to: Insurance times, 30 Cannon Street, London, EC4M 6YJ or Email to
Andy@instimes.co.uk or Fax : 020 7618 3499