As the UK moves to its highest level of terror alert, Norwich Union has underlined the need for businesses to be aware of the need for adequate cover.

Businesses have been warned to ensure they have adequate levels of property and business interruption cover following the latest terror threats in the UK.

Martin Singleton, technical manager, property, for Norwich Union said: "Damage resulting from acts of terrorism is a standard exclusion under virtually all commercial property policies in the UK and policyholders must ensure that they purchase terrorism insurance separately to obtain cover.

"Many UK commercial property insurers are members of Pool Reinsurance Company Limited (Pool Re), a mutual reinsurance company through which they can offer cover for acts of terrorism in Great Britain to their policyholders.

"However, in the case of the two recent incidents in London, where there was no damage to property, Pool Re terrorism cover will not apply and policyholders must ensure that they have purchased adequate Business Interruption extensions that can provide cover, for incidents of this nature."

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While the right level of insurance protection is vital, businesses should also ensure that adequate risk management measures, including a business continuity plan, are in place.

Martin Singleton, technical manager, property, for Norwich Union

Singleton added: "While the right level of insurance protection is vital, businesses should also ensure that adequate risk management measures, including a business continuity plan, are in place.

"Our overall advice is that before creating any additional measures, review what is already in place - implement good basic security practices and test them regularly. Businesses are often reluctant to create contingency plans because of the perceived cost that may be involved. However, often the cost of doing nothing outweighs the cost to the business when an incident occurs. Statistics show that even minor incidents can cost small companies an average of two days lost business at a cost of up to £10,000."

Norwich Union Risk Services operates a Risk Helpline during normal business hours for the cost of a local telephone call - 0845 366 66 66.

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