Why are terrorism premiums decreasing?

It is an inescapable and sad truth that the UK remains on high alert for terrorist attacks. The threat to life and society are naturally the biggest concern, but terrorism also poses a significant threat to the UK economy and, in particular, small businesses.

Unfortunately, many SMEs do not have adequate insurance cover for acts of terror due to lack of awareness or funds, leaving them financially vulnerable. The good news is that terrorism premiums are decreasing and products are becoming more accessible.

In March 2022, a 5-year plan was approved by the government allowing Pool Re, the largest terrorism reinsurer in the UK, to reduce their overall prices by 20%. This is designed to bolster the market, giving insurers more confidence to offer terrorism cover and the ability to pass on lower premiums to UK businesses.

In addition to the price reduction, insurance companies have the added peace of mind of the government’s unlimited financial guarantee for another five years.

Pool Re has also committed to address a lack of awareness among SMEs about assessing their threat level and how to insure against terrorist acts. This is all great news for small businesses, arming them with the knowledge to mitigate their financial risk and the access to affordable cover.

Glowsure works with many SMEs and landlords to help them protect their business against terrorist acts. If you need advice on what type of cover is available to you, then do not hesitate to get in touch.

What is terrorism insurance?

A terrorism insurance policy covers businesses for damage caused by acts of terrorism. This could be damage to buildings, contents (such as equipment and furnishings) or stock. A lot of terrorism policies include business interruption, covering the costs of lost income if a business is forced to close. In addition, some insurance products cover the company’s liability in the case of terrorist acts.

Most commercial property insurance policies do not include acts of terrorism as standard. So if the geographical location of your business or the industry in which you operate is at high risk, then it is very wise to consider taking out a separate terrorism policy.

Do you have to have terrorism insurance cover?

Businesses are not legally required to have insurance cover for terrorist acts. For many businesses, the risk of terrorism is so low that it is not worth the investment, for example, those based in remote or rural areas.

Which businesses are more at risk from terrorism?

Some businesses are at greater risk from terrorism due to their geographic location, eg. near major transport terminals, or in city centres. Some industries are clearly more at risk than others due to political sensitivity, such as finance, manufacturing and energy.

For these businesses, terrorism cover is a necessity, especially considering the the current terrorism threat level in the UK (at the time of writing) is substantial.

Do small businesses need terrorism insurance cover?

Without adequate terrorism cover, UK businesses could find themselves at financial risk. While large companies may be able to weather the storm, for SMEs the loss could be devastating.

Worryingly, research suggests that there is a real lack of awareness among SMEs about how to plan for acts of terrorism and what insurance cover is available, leaving thousands vulnerable.

Small business owners and landlords, therefore, are wise to consider their exposure to terrorism risk and develop a robust crisis management plan, including adequate insurance cover.

If you need help to protect your business from acts of terror, then contact the experts at Glowsure.

How do the changes to terrorism premiums affect small businesses?

Historically, it has been difficult for small businesses to access insurance cover for terrorist acts. Some insurance companies have shied away from including it in their product offering, simply because of its unpredictable nature and potentially large payouts.

Fortunately, the approval of the Pool Re 5-year plan opens up the market, giving vital confidence to insurers to offer more terrorism products to more businesses, with lower premiums. This will hopefully make cover more accessible to the small businesses that need it, making them more resilient to damage and business interruption caused by terrorist acts.

Glowsure can help you protect your business for less

The team at Glowsure are commercial property insurance experts, and as such we’re fully up to speed on all matters regarding insurance for terrorist acts.

We believe that all small businesses have the right to affordable terrorism insurance cover and are dedicated to finding them the best products and premiums. Contact us today to request a call back and we’ll be in touch as soon as we can.


What is the Reinsurance (Acts of Terrorism) Act 1993?

The Reinsurance (Acts of Terrorism) Act was established in 1993 in reaction to a devastating series of terrorist attacks in Great Britain. The events caused a major loss of confidence in the reinsurance industry, resulting in many reinsurers exiting the terrorism insurance market. This left the UK economy highly vulnerable to future attacks.

To redress the balance, Pool Reinsurance Company Limited (Pool Re) was established, backed by an unlimited government guarantee. This gave Pool Re’s members renewed confidence in offering terrorism insurance products to businesses.

What is Pool Re?

The Pool Reinsurance Company Limited (Pool Re) is a private sector, mutual company, set up by the insurance industry in 1993.

It is the largest terrorism reinsurer in the UK and counts over 150 insurance companies as members. Their goal is to build the UK economy’s resilience in the response to terrorist attacks.

Members of Pool Re have the reassurance of an unlimited financial guarantee from Her Majesty’s Government, meaning that they can access affordable reinsurance cover for acts of terrorism, with extended repayment times if necessary. This guarantee has just been extended for another five years.


With the recent approval of Pool Re’s 5-year plan, insurance companies have been given valuable reassurance in providing cover for terrorist acts at lower premiums. Pool Re have also committed to raise awareness amongst SMEs about their exposure to terrorism risk and how to mitigate against it.

This is great news for small businesses in high risk geographical areas or industries, giving them access to a wider range of affordable insurance cover to aid their recovery in the event of a future terrorist attack.

Picture of Wesley Haynes
Wesley Haynes
Wesley is the Director at Glowsure Insurance Brokers. He's passionate about giving the best customer service he can, and this is at the core of everything at Glowsure.
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