TT Talk - Cover Breakthrough

In a Circular dated 1 December, the TT Club announced a new cover for Nuclear and Bio-Chemical Terrorist Risks. The Circular reads in part:

"A unique facility offering cover up to a targeted aggregate pool limit of US$100m for 2007 has been set up by the Club. It offers Club Members protection for liabilities, loss and damage to assets and business interruption claims arising out of the discovery of or emission from a nuclear, bio-chemical and or radiological terrorist attack - a so-called 'dirty bomb'. The cover is in two sections: (A) Cover up to US$25m each incident for liability, physical damage and/or business interruption arising out of the discovery of or emission from a device directly affecting a Member's insured facility, and: (B) Cover of up to a maximum of US$5m each year for contingent business interruption losses suffered by a Member as a direct consequence of an incident in another location anywhere in the world.

This new facility for Club Members (which guarantees a minimum of US$50m aggregate pool limit) provides cover for a risk that is generally excluded from all commercial insurance policies. It offers valuable protection against the possibility of a 'dirty bomb' being secreted in a container or discovered in a port or terminal, or for a Member's financial loss suffered as a result of significant trade disruption."

The Circular goes on to explain that the Cover will be offered as a separate twelve month entry for each Member commencing on 1st January 2007. If the annual aggregate limit of cover for the pool is exceeded, claims payments will be reduced pro-rata (with claims under (A) taking priority). Members interested in the cover are invited to approach their broker or their local TT Club office for a quotation.

The idea of offering cover based on an annual aggregate limit for all claims from all insureds can be viewed as a logical development from the Club's War Risks on Land cover, which has been in operation now for over twenty years. This, too, enables Club Members to be insured against risks that the commercial market normally excludes, subject to an annual aggregate limit for all claims from all Members.