The Bondi Beach attack on 14 December was declared a terrorism event under the Terrorism and Cyclone Insurance Act 2003 (TCI Act) and a Terrorism Reinsurance Pool (TRP) was activated, with the Insurance Council of Australia (ICA) declaring the attack a major event.
The Treasury Secretary’s declaration activates the provisions of the Act regarding qualified terrorism losses and takes precedence over terrorism exclusions in qualifying contracts. This means businesses will be able to claim for any losses caused by the attack under the terms and conditions of their policy.
The TRP is operated by Australian Reinsurance Pools Corporation (ARPC), which has confirmed that the reduction percentage for this declared terrorism incident has been set at 0%, meaning that there will be no reduction in the liability of eligible insurers for reinsurance recovery purposes under the TCI Act.
ARPC provides reinsurance for commercial property, business interruption and public liability coverage against terrorism catastrophic losses. It is backed by $10 billion in federal guarantees, ensuring the ability to support insurers and policyholders after a terrorist incident.
Dr Christopher Wallace, CEO of ARPC, said: “The Terrorism Reinsurance Pool exists to protect the Australian insurance market from the financial impact of rare but serious terrorism events. Today’s announcement ensures that insurers can apply the provisions of the TCI Act and start assessing eligible claims under the scheme.”
Dr Wallace added: “We are deeply saddened by the tragic events at Bondi Beach. Our thoughts are with the bereaved families, survivors and everyone affected by this incident.”
The Bondi Beach terror attack has become Australia’s worst mass shooting in decades, with two armed men killing at least 15 people during a Jewish celebration on Sunday, December 14, and more than 20 people still being treated in hospital, according to mainstream news reports.
Due to the seriousness of the incident, the ICA declared the shooting a major incident to prioritize insurance companies’ support for claimants and to collect and track claims data.
The ICA encourages businesses to contact their insurance company or broker to find out what claims they may be able to make.
ICA chief executive Andrew Hall said: “Our first thoughts are with the Australian Jewish community following Sunday’s horrific attack. The industry is committed to supporting those Bondi businesses affected in the recovery process ahead.”
ARPC provides some guidance to help assess potential losses and prepare for reinsurer involvement.
“All insurance customers are urged to notify ARPC of any potential claims or losses arising from the Bondi Beach incident as soon as possible.
“Terrorism exclusions in eligible policies have no impact on losses or liabilities in the event of a declared terrorism event. Insurers are responsible for evaluating, adjusting and paying any claims under an eligible policy in accordance with all other original policy terms and conditions,” ARPC said.
