The devastating terrorist bomb attack in Bali dominated media headlines in October. The awful reality of the Bali bombing inevitably drew the media’s attention to the usefulness of travel insurance. ICA’s Insurance Disaster Response Organisation was swift in providing some initial guidance to Bali evacuees and those cancelling holidays.

At the end of October Treasurer Peter Costello unveiled the Federal Government’s national scheme to provide insurance protection against future terrorist attacks. The Government’s four-level scheme involves a Government administered pool covering terrorist attacks to commercial property and infrastructure facilities, and will include associated business interruption and public liability insurance. It will cover damage caused by terrorist activity, including fire, flood, explosion, impact of aircraft, biological and chemical causes but not nuclear incidents.

Funding for the estimated $300 million needed for the scheme will come through levies on property premiums (unfortunately, as NIBA CEO Noel Pettersen pointed out, yet another tax added to premiums). The scheme will compel insurance companies to provide cover for terrorism risk on all policies in all classes of insurance included under the scheme. It will operate from July 1 next year. Legislation to set up the scheme will be introduced into Parliament shortly.