Catlin Insurance Company Ltd. (Catlin Bermuda), a subsidiary of the Bermuda-based Catlin Group Limited, announced the launch of “an insurance and reinsurance product that provides affordable coverage for acts of nuclear, chemical, biological or radiological (NCBR) terrorism.”
Catlin’s pointed out that “insurers have, historically, been reluctant to provide coverage for NCBR events,” due in part to the “unacceptable accumulation of risk” they inherently pose.
Catlin Bermuda said its new coverage “overcomes this problem by restricting the coverage to NCBR events which occur in a specified geographic area that is pre-defined by the insured or cedant. The Catlin coverage can be provided on an insurance or reinsurance basis and can cover most underlying forms of insurance (e.g. workers compensation, property damage, business interruption etc.).
“By restricting the geographic area covered, Catlin Bermuda has created a product whereby significantly more insurance and reinsurance capacity should now be available for NCBR terrorism at much more reasonable pricing levels.”
The bulletin also notes that the “coverage can be used to supplement individual countries’ national terrorism insurance frameworks, such as the US Terrorism Risk Insurance Extension Act (TRIEA). This can be done either by providing protection for losses within an assured’s or cedant’s retentions, coparticipation or plugging other gaps in the frameworks (such as personal accident exclusions). It is important to note that in the United States this coverage includes both TRIEA and non-TRIEA (i.e. domestic terrorism) events related to an NCBR attack.”
The threats, according to Catlin, are quite real. “A leading catastrophe modeling agency has stated there is a 5 per cent probability of an NCBR terrorist event occurring in the United States within the next 12 months,” the bulletin noted. “There have been serious NCBR events in the recent past including the release of Sarin gas in the Tokyo subway system in 1995 and the Anthrax attacks that occurred in the United States in 2001. In addition there have been planned Ricin attacks in London and a planned dirty bomb attack in Moscow.
“Typical risks quoted to date include energy installations, railway stations, ports, airports, sports stadiums and large office buildings. The geographic area covered can vary from a quarter-mile radius to state- or province-wide coverage. The price will vary depending upon the size of area covered and the location insured. Coverage can be provided inside and outside the United States.”
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