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 cover (as defined by Pool Re) 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, there would be 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 professional indemnity insurers.

Obviously, all commercial clients from the smallest shop upwards will need to be made aware of these fairly complex issues. I spent most of a day compiling a letter to all clients to attach to all renewals from 1 January, with no help from insurers or Biba, have you?

Adrian Sutton
Douglas Insurance,

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