Insurers must provide the Treasury with evidence that they cannot cover terrorism, before the Treasury will consider extending Pool Re's remit.
Representatives from the Association of British Insurers (ABI), the Confederation of British Industry (CBI), the British Property Federation (BPF) and the British Retail Consortium (BRC) met Treasury officials on 6
March to discuss the lack of terrorism cover.
An ABI spokesman said they discussed the range of property risks Pool Re could cover and the possibility of extending its current remit of fire and explosion to impact damage and contamination risks.
He said they also talked about extending its remit to cover legal liabilities such as employers' liability and motor, which would require new legislation.
"The Treasury isn't against doing this, but it wants evidence that the market can't cover these risks before it looks at doing so," he said.
The ABI will consult its members before returning for more talks with the Treasury.
"If there is evidence the market is having trouble, we'll ensure it's brought to the Treasury's attention," the spokesman said.
"There's no strict timetable for talks but we want to resolve these issues as quickly as possible."
The CBI, BPF and BRC were at the meeting to explain the effect lack of terrorism cover was having on business and to support the ABI.
