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Terrorism insurance scheme widens scope

The Australian Reinsurance Pool Corporation (ARPC) has been expanded to include mixed-use and high-value residential buildings.

The changes, which were recommended by Treasury’s triennial review in 2015, have been approved and will be effective from July 1.

The definition of eligible property has been widened to include buildings with a commercial floor space of at least 20%, or that have a building sum insured of at least $50 million, regardless of use.

The Terrorism Insurance Act has also been amended to remove doubts over coverage for chemical or biological attacks.

The scheme covers such incidents – but not nuclear or radiological events.

The definition of a terrorism exclusion or exception will be extended to include acts described as chemical, biological, polluting, contaminating, pathogenic, poisoning, or words of similar effect.

ARPC Chief Underwriting Officer Michael Pennell says the clarifications will benefit insurers and policyholders.

“These changes will modernise scheme coverage, underpin its financial strength, and ensure the ARPC is better equipped to protect Australia from the economic losses caused by terrorism catastrophe,” he said.

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