Standard property insurance cover on a block of flats is unlikely to automatically include damage caused by terrorism. The cost to add Terrorism insurance to a policy may be relatively low depending on property location, with certain cities carrying a higher risk and therefore likely seeing a higher premium.
‘Do I need Terrorism insurance’ is a question our sales team are regularly asked and you may find the answer lies within your lease or from your mortgage provider.
The Court of Appeal, in the Qdime1 case, upheld that if an insurance clause in your lease includes a requirement to insure against explosion, then this should include explosion caused by terrorism. The ruling made clear that this cover is a requirement of some leases and should be added to an insurance policy.
Some management company’s or leaseholders in a block of flats could object to the inclusion of the terrorism insurance costs within the service charge, however in the QDime case, the landlord argued, and the Upper Tribunal agreed, that the requirement was to insure against the risk of an explosion, regardless of the cause of the explosion.
Explosion is not defined by its cause and therefore, when given its ordinary meaning, explosion could include an explosion caused by an act of terrorism – hence the requirement for terrorism insurance.
Like to learn more?
For more information on the benefits terrorism insurance from Deacon, look at our Product Guide here or contact us on 08000 92 93 94 to discuss further.
- https://www.jbleitch.co.uk/news/qdime-limited-v-bath-building-management-company-limited-ors
FP1294-2021
First published 20 January 2017
Updated 29 November 2021
The sole purpose of this article is to provide guidance on the issues covered. This is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited (Gallagher) trading as Deacon accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.