The dearth of insurers willing to offer terrorism cover could cripple UK businesses, according to a snapshot survey published by the Association of Insurance and Risk Managers (Airmic).
The survey, in conjunction with the Association of British Insurers (ABI), sends a stark warning to the government that the lack of cover could put small businesses out of business.
Airmic members, which consist of mostly commercial buyers of insurance, said in the survey that they would advise commercial clients to relocate to urban areas if public liability insurance cover were not available. Most respondents said it would impact negatively on overseas investment in the UK.
Limiting employers' liability insurance cover to £5m per event would undermine general business practice, the survey said, since this limit could be quickly exceeded given the massive potential exposure of most businesses. This was a similar response in regard to the scenario in which motor policies were limited to £250,000 per event for third party cover.
Airmic's executive director David Gamble said: "For risk managers already faced with a hard insurance market, and heavily increased renewal premiums in many sectors following the September 11 terrorist acts, the thought of any further restrictions or reductions in terrorism insurance cover is anathema."
