Following an act of Terrorism in Christchurch on 15 March 2019, the decision was made to cancel a number of high profile events across the country.
In this post, I will look to provide an overview of the terrorism cover provided within the EventCover policy wording and explain how the policy would react to an act of terrorism compared to a threat or fear.
Under the EventCover Event Cancellation policy, Terrorism is defined as 'an unlawful act, including but not limited to the use of force or violence, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organisation(s) or government(s), committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public, or any section of the public, in fear."
Threat of terrorism is defined as "information received by local or national governmental authorities relating to terrorism that poses or appears to pose a real risk of physical loss or damage or actual bodily injury or death if the event were to proceed, whether or not such risk subsequently proves to have been real or hoax."
Under the standard policy and within the "Time and Distance" terrorism endorsement, the Net Loss, as defined, is covered should the insured event be necessarily cancelled, abandoned, postponed, interrupted, curtailed or relocated as a sole and direct result of Terrorism or Threat of Terrorism.
What this means is that for a successful notification under the Terrorism cover afforded under the policy, the event must be necessarily cancelled, as a sole and direct result of either Terrorism at the venue, or within New Zealand, that occurs within 50 days of the scheduled start date of the event, or during the open period of the event. The emphasis here (as highlighted) is the necessary cancellation, as a sole and direct result of Terrorism. This is also the same for a successful notification under the Threat of Terrorism cover whereby the event must have been necessarily cancelled as a direct and sole result following information received by local or national government authorities relating to a threat which posed or appears to pose a real danger, whether or not the threat subsequently proves to have been real or a hoax.
Almost all of the events that were cancelled following the Christchurch attack, were cancelled due to a "fear" of terrorism or due to a moral decision. Whilst the decisions taken were understandable, the terrorism cover under the policy would not react in these instances. Fear of Terrorism is an automatic exclusion under an event cancellation policy.
Disclaimer: The information contained herein is based on sources believed reliable but no representations or warranties, expressed or implied, are made concerning the accuracy of information contained herein or the financial condition, solvency, or application of policy wordings of insurers or reinsurers. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such. The descriptions contained in this article are for preliminary purposes only. Sage Partners Ltd operating as EventCover New Zealand (ECNZ) is the agent of Certain Underwriters at Lloyd’s of London and all coverages are underwritten via Certain Underwriters at Lloyds of London. The exact coverage provided by these products is subject to and governed by the terms and conditions of each policy issued.