Does Your Industrial Property Owners Insurance Cover Terrorism Act?


Industrial Property Owners Insurance Cover Terrorism

The Lindt Café Attack has opened a huge gaping hole in an otherwise laidback urbanite setting of Sydney. But beyond Martin Place, the fear of such gruesome terrorism attack gripped the whole nation putting many on its knees. The despicable truth is that—it can happen again. While the country’s national security may have beefed up its fortress, it is quite unfortunate that evils of society will always find a way to penetrate those multi-layered safety nets and their next target may no longer be people but industrial properties with the intent of bigger damages. With this, one will need a reliable industrial property owners insurance to cover terrorism gap.


ARPC and the Terrorism Insurance Act of 2003


Days after the attack, insurance analysts in the region have mulled over the lack of insurance coverage to protect investment properties against terrorism damage. This somehow leaves a huge burden on the shoulders of property owners. While property owners are busy reviewing and upgrading insurance coverage for their industrial properties to ensure that production or manufacturing of goods or services are not stunted, new legislation have been promulgated to support such a move.


Enter the Australian Reinsurance Pool Corporation, a legislative authority mandated by the state to pursue the Terrorism Insurance Act 2003. This act clearly states that insurers must provide limited coverage for losses applicable only to commercial properties with occupancy rate of 50 percent or more. This somehow leaves a huge gap among various segments in the rental property market as support mechanism is nil for industrial complexes or even to residential units. This will leave them scampering with nothing in the event of terrorism acts done to their properties. It must also be pointed out that many industrial complexes today are basically littered with coffee shops, restaurants, and other retail shops to add oomph to the marketability of the property.




By recognizing this critical blunder, the insurance industry is called upon to review and update insurance policies of their clients caught in mixed-use properties. Some insurers now extend coverage for properties up to $100M regardless of the type. For many holders of outstanding industrial property owner’s insurance policies, this is the best time to double check with their insurer or broker for the following coverage:


  • collateral damage from explosion within or outside the but within a stipulated radius of the incident
  • industrial properties being maliciously used to manufacture or produce explosive device that accidentally detonates
  • siege or riots subjected to your property
  • employer liability
  • damage to external equipment and machinery as well as transportation, communication, and other systems of importance to business operation


When thinking of reviewing or updating your industrial property owners insurance to include terrorism act coverage, today is the right time to talk with your insurer or broker. Carefully outline your requirement and see to it that you are well within stipulations as mandated by law. While insurance coverage are always subject to terms, conditions, limits, and exclusions, a reliable insurance-broker will always find a way to accommodate your concern.


Want to protect your industrial property from any terrorist act? Request a policy review by scheduling a consultation with Landlord Insurance HQ. Call 1300 815 344 or request a quote online now!