Terror risk management has remained relatively unchanged since September 11, 2001. Under current Canadian law terror including fire following may be excluded, though fire following exclusions have not been adopted for personal lines. The fire following aspect is being reviewed in a number of provincial jurisdictions. With respect to commercial property, terror can be excluded and there is a broader view that the practice of excluding fire following is acceptable.
While the issue of fire following terror on commercial policies seems to be getting clearer, the definition of terror has become an item of discussion. In some jurisdictions, there is a concern that the current Canadian definition of “terror” could include ideologically motivated acts of vandalism. Vandalism coverage is currently offered under most broad multi-peril property policies.
Current Definition of Terrorism in Canada:
“Terrorism means an ideologically motivated unlawful act or acts, including but not limited to the use of violence or force or threat of violence or force, committed by or on behalf of any group(s), organization(s), or government(s) for the purpose of influencing any government and/or instilling fear in the public or a section of the public.”
Insurance Bureau of Canada
The Insurance Bureau of Canada has been in discussion with a number of the provinces on the definition of terror.
The insurance industry continues to support a government-backed terror pool, and there are hopes that these discussions will start again with the federal government in the near future. Canada is one of few industrialized nations worldwide that does not have a national back stop for terror risk.
(The report includes all charts and exhibits)
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