Insurers to access Terrorism Reinsurance Pool as Bondi Beach attack declared a terrorism incident
The Bondi Beach attack on December 14th has been declared a terrorism incident for insurance purposes under the Terrorism and Cyclone Insurance Act 2003 (TCI Act), activating the Terrorism Reinsurance Pool (TRP) as the Insurance Council of Australia (ICA) declares the attack a significant event.
The declaration made by the Treasurer activates the provisions of the Act relating to eligible terrorism losses, and overrides terrorism exclusion clauses in eligible contracts. This means businesses will be able to claim any damages arising from the attack in line with their policy terms and conditions.
The TRP is operated by the Australian Reinsurance Pool Corporation (the ARPC), which has confirmed that the reduction percentage for this declared terrorism incident has been set at 0%, meaning no reduction will apply to eligible insurer liabilities for the purposes of reinsurance recoveries under the TCI Act.
The ARPC provides reinsurance coverage for commercial property, business interruption, and public liability insurance against terrorism catastrophe losses. It is backed by a $10 billion Commonwealth guarantee, which ensures the financial capacity to support insurance companies and policyholders following a declared terrorism event.
“The Terrorism Reinsurance Pool exists to safeguard the Australian insurance market from the financial impact of rare but severe terrorism events. Today’s declaration ensures insurers can apply the TCI Act provisions and begin assessing eligible claims under the framework of the scheme,” said ARPC Chief Executive, Dr. Christopher Wallace.
“We are deeply saddened by the tragic incident that occurred at Bondi Beach. Our thoughts are with the families who have lost loved ones, the survivors, and everyone affected by this event,” added Dr. Wallace.
The Bondi beach terror attack has become Australia’s worst mass shooting for decades, after two armed men killed at least 15 people at a Jewish celebration on Sunday December 14th, with more than 20 people still in hospital, according to mainstream news reports.
The severity of the event saw the ICA declare the shooting a significant event, thereby prioritising insurer support for those making claims and enable claims data to be collected and tracked.
The ICA encourages businesses to get in touch with their insurance firm or broker to understand what they may be able to claim for.
“Our thoughts first and foremost are with Australia’s Jewish Community in this time of great mourning for the victims of Sunday’s horrendous attack. The industry is committed to supporting those Bondi businesses impacted through the recovery ahead,” said ICA CEO, Andrew Hall.
The ARPC has provided some guidance to assist in assessing potential losses and preparing for reinsurer engagement.
“All insurer clients are requested to notify ARPC of any potential claims or losses arising from the Bondi Beach incident as soon as possible.
“A terrorism exclusion in eligible policies has no effect to a loss or liability in the event of a declared terrorism incident. Insurers have the responsibility to assess, adjust and pay any claims on eligible policies in accordance with all other original policy terms and conditions,” states the ARPC.
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