The Federal Government has finally given some indication of how far it’s prepared to go to provide terrorism cover for Australian businesses. In a nutshell, not much at all right now.

Since the global insurance industry withdrew terrorism coverage, the Government’s response has been muted. Now Treasurer Peter Costello has indicated the Government might provide some form of indemnity against terrorism for owners of major properties and infrastructure projects after June 30. The rest of Australian business doesn’t appear to get a look-in.

Mr Costello said the Government would offer indemnity in catastrophic cases, above certain limits. But he wouldn’t commit to a date when such an agreement might come into force.

Property Council CEO Peter Verwer said the Government “is mindful that by June 30 most of Australia’s built environment will be uncovered”. The council estimates that some $75 billion of office towers and shopping centres are without cover at present, and the figure could double after June 30.

The ICA and Property Council have proposed a solution based on the Pool Re scheme in the UK, which was set up after IRA attacks on British civilian targets.

Pool Re is managed by the British insurance industry. If the pool can’t cover a claim, insurers involved provide assistance, with any further claims met by the Government.