01 Jul Important changes to the Australian Terrorism Insurance Scheme
Automatic Terrorism Cover for strata buildings.
The Australia’s Terrorism Insurance Scheme was originally designed to provide automatic Terrorism cover for commercial buildings only under the Terrorism Insurance Act 2003 subject to a Terrorism Levy. As a consequence, sizeable residential strata buildings which are located and/or surrounded by commercial buildings are currently relying on the capacity of a limited number of available insurers to offer this cover under their residential strata policy.
Starting from 1st July 2017, the definition of eligible property for Australia’s Terrorism Insurance Scheme is extended to include;
1. Mixed-use strata buildings with at least 20% of total floor space used for commercial purposes.
2. Residential strata buildings with a Building Sum Insured (BSI) equals to or greater than $50 million
Further, the Terrorism cover is also extended to include acts described as “chemical”, “biological”, “polluting”, “contaminating”, “pathogenic”, poisoning” or words of similar effect.
Implications to insurance premium
The insurers of eligible properties will be required to collect Terrorism Insurance Scheme premiums on behalf of the Australian Reinsurance Pool Corporation (ARPC) which will be reflected in their premium.
These changes will add more protection to the Australian Strata community as the limitation attached to strata buildings in having a Terrorism cover in place is now effectively reduced.
For more information regarding the Terrorism Insurance Amendment Regulations 2017, please visit the ARPC website.
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