At a glance
  • Check your lease / tenancy agreements and ensure that it specifies if Terrorism Insurance is required or not
  • If the agreement is not specific, clarify the situation with the other party
  • If Terrorism cover is required, either as part of the agreement or because you wish to protect yourself against a Terrorist event
24th July 2017

Does your lease require you to have Terrorism cover

Are you aware that your lease or tenancy agreement may require you to insure against Terrorism, even if it doesn’t say so?

This was the conclusion of a Leasehold Tribunal that was asked to resolve a dispute between a Landlord and Tenant. The case was Qdime Ltd -v- Bath Building (Swindon) Management Company Ltd and the crux of the matter was whether the lease which stated the property had to be insured against explosion, also implied explosion caused by a Terrorist event.

Initially, the Tribunal held that the lease contained no obligation to insure against Terrorism, only Fire and usual risks. Whilst explosion is a usual risk covered by property insurance, Terrorism is not an additional cover must be requested and obtained.

The case went to appeal. The argument put forward was that explosion is not defined by its cause, in other words, an explosion is an explosion regardless of what causes it. Therefore if the lease requires insurance to be obtained against explosion, this should include Terrorism insurance, because a terrorist attack can result in an explosion.

The appeal agreed and stated, “The obligation is to insure against explosion, not against any particular method by which an explosion might be caused”. Therefore, the lease agreement did include the need for Terrorism cover even though not expressly stated.

For Landlords and Tenants, we recommend the following steps

  • Check your lease/tenancy agreements and ensure that it specifies if Terrorism Insurance is required or not
  • If the agreement is not specific, clarify the situation with the other party
  • If Terrorism cover is required, either as part of the agreement or because you wish to protect yourself against a Terrorist event, please contact us to discuss your needs  

For further information about this, please get in touch with your Account Handler or click below to make an enquiry.

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Category:

Commercial