UK Terrorism Insurance BrochurePrepared August 2016

Inperio Limited, 150 Minories, London, EC3N 1LS, United Kingdom Tel +44 (0)203 176 5640 | www.Inperio.co.uk

Company Registration number 09052181An Appointed Representative of Bannerman Rendell. Registered in England No. 609004. FCA Firm Reference Number 308692

2Inperio Limited(1) Introduction

Introduction

1The threat of terrorism throughout the world is rising, and extremist groups are now global and may target businesses anywhere in the world, rarely giving warning. Organisations and individuals may not be the intended target themselves, yet can still be effected by terrorism related activity or events occurring in the proximity to their own operation. An attack not on, but simply near their premises, could result in property damage, business interruption, legal liability issues, denial of access, relocation costs and long-term damage to reputation. Terrorism insurance is also a requirement for many commercial property leases, and is often listed as a condition for bank lending. This has made Terrorism insurance an important consideration for a client seeking to mitigate their exposure to risk.

The Pool Re scheme, was set up in conjunction with HM Government in 1993 in response to a series of attacks related to the Northern Ireland troubles. Pool Re responds to terrorism losses which, before 1993, would have been covered by the property insurer and a large majority of Property insurers are obliged to use this scheme and cannot offer an alternative terrorism option. One of the limitations where Pool Re terrorism insurance is concerned, is that attacks must be committed by individuals connected to an organisation which is seeking to influence or overthrow a government by force or violence

Inperio believe that the Standard Pool Re scheme has serious shortcomings, and could be financially inefficient and narrow for some clients with specific business operations or large property portfolios who are seeking to minimise premium expenditure. Therefore to address these, we have created a competitively priced alternative Terrorism Insurance cover in partnership with Certain Underwriters at Lloyd's of London. This scheme has a number of benefits and pricing advantages over the standard Pool Re option, which are summarised and detailed overleaf.

Inperio Limited 3(2) Pool Re v Inperio

Pool Re v Inperio

2Pool Re Inperio Terrorism

Pool Re only covers terrorism intended to influence or overthrow the government (and not, for example, action by animal-rights groups).

Cover is similar to Pool Re but extends to include sabotage, acts committed for political, religious or ideological purposes (eg animal right, environmental), and acts which solely put the public in fear.

You depend on HM Treasury deciding whether an act was terrorist in nature.

You don’t depend on HM Treasury to agree whether an event was terrorism.

Cover excludes persons acting alone. Covers includes acts committed by an individual.

Cover excludes residential properties occupied by the owner.

No types of property are excluded. Cover can include your residential property.

Can not protect individual properties; and must insure the entire property portfolio.

Unlike Pool Re, not every property in the portfolio must be included. Individual properties in a portfolio can be insured.

Pricing is not always competitive with the open market.

Cover is usually more competitively priced.

Pool Re only allows the portfolio to be insured on a full value basis of the individual building values.

A first loss limit can be chosen across a number of geographically spread properties to reflect the lower risk.

Pool Re includes losses arising from nuclear, chemical, biological or radiological terrorism

No cover for nuclear, chemical, biological or radiological terrorism.

4Inperio Limited(3) First Loss Limit

First Loss Limit

3The Inperio Terrorism Insurance facility offers the proposer the opportunity to arrange a Terrorism Insurance policy on a “First Loss Limit" coverage basis. First Loss Limit coverage is where a property portfolio is insured partially and not totally; for the estimated largest possible loss the portfolio may suffer, but not a complete loss of the whole portfolio.

This partial coverage creates the potential to receive a reduction in the premium required from Insurers, because the First Loss Limit of insurance cover on the portfolio is less than the total portfolio value as a whole.

Typically, First Loss Limit coverage is selected where insured property is spread across multiple geographical locations and it is considered unlikely that one Terrorist event would impact on all the insured properties in the portfolio to their total insured value.

The First Loss Limit is a monetary value chosen by the proposer and may not be directly proportional to the portfolio being proposed. This mechanism is advantageous to the proposer as it allows for a saving to be made on the premium that corresponds to the First Loss Limit chosen and for a more flexible policy that they feel will better reflect their risk requirements.

By offering a First Loss Limit Inperio can offer a more customised approach to protecting a property portfolio against Terrorism risks combined with premium savings that can be achieved through careful considering of the partial limit to be applied.

5Inperio Limited(4) First Loss Limit

Selective Portfolio

4One of the great strengths of Inperio’s terrorism product is the ability to customise the elements of the proposer’s portfolio which they wish to be insured against a terrorist event.

Should the proposer have assets in multiple different areas, whether they be large UK cities such as London or Manchester, or more rural counties such as Devon or Cornwall, then the needs for insurance against a terrorist event will obviously differ.

Additionally, the proposer may have secured credit against a number of properties, for which the lender requires terrorism insurance to be purchased, but does not wish to insure the 100% owned properties in the portfolio.

This facility allows the proposer to be selective in which properties in the portfolio require terrorism insurance, as opposed to Pool Re which only allows the whole portfolio to be insured, thus increasing overall premium spend for properties which do not necessarily require cover. This ability to selectively customise the insured terrorism risks can generate significant savings over Pool Re.

A further feature of managing your portfolio online is the ability to easily add or remove an asset at will to or from the portfolio. The online platform will automatically generate a quote for an additional premium/return premium if required.

These elements of portfolio selection and customisation mean that it is easy to dynamically alter the details of their policy, with a focus on tailoring the policy to the proposer’s specific requirements.

Inperio Limited 6(5)First Loss Limit

Business Interruption

5Our wide policy coverage includes the essential ‘denial of access’ extension (subject to the underlying property policy) that offers an enhanced breadth of coverage, and ensures businesses enjoy protection in the event of an incident within 1000m of their own property which prevents the insured from directly operating from or gaining access to their premises, up to a fixed sub limit. This is especially important should the proposer's building be located near to a high profile target.

The ‘Increased Cost of Working’ (ICOW) extension included in the wording will ensure that business can benefit from relocating quickly to alternative premises, and minimise the financial disruption and expenditure caused by a temporary or permanent relocation.

Not only does the Inperio Terrorism insurance policy covers acts of terrorism themselves, but additionally acts of sabotage are covered. An act of sabotage is a subversive act, or series of such acts committed for political, religious or ideological purposes, including the intention to influence any government and/or to put the public in fear for such purposes.

This broader wording definition offers businesses a more comprehensive level of cover when compared to Pool Re, and can be extremely beneficial for higher risk targets.

Inperio Limited, 150 Minories, London, EC3N 1LS, United KingdomTel +44 (0)20 3176 5640 | www.Inperio.co.uk | Company Registration number 09052181An Appointed Representative of Bannerman Rendell. Registered in England No. 609004.