Letter: Withdrawal of bomb insurance

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Sir: As if the property market were not already on its knees, the recent threat by insurers to refuse cover for bomb damage has severe implications not just for the property market but for the survival of businesses that may be affected by terrorist activity.

While landlords are normally obliged to provide comprehensive buildings cover, it is unlikely that a court would find them in breach of their obligations if they were unable to obtain insurance against terrorism.

On the other hand, tenants remain obliged to pay their rent for three years even if they cannot use their offices because of bomb damage. They are then obliged to move back into the reconstructed building or take on the liability of disposing of the lease. To add insult to injury, insurers may well now refuse contents cover, which could easily close a business down permanently overnight.

Terrorism itself is a national problem and should not be viewed as a private one. Surely the time has come for the Government to accept that part of its responsibility for tackling terrorism is to cover landlords and tenants where insurers have refused, as they have done in Northern Ireland.

Perhaps it will mean another half-penny or thereabouts on income tax, but it is the Government's duty to stamp out terrorism and to cover the financial consequences.

A precedent was set by the government at the end of the Second World War in creating the War Damage Fund, and a similar example should now be set by this Government to prevent a major crisis which in itself would be food and drink for the terrorists. Let us see some action in this direction as soon as possible.

Yours truly,


Senior Partner

Baker Lorenz (Surveyors,

Valuers, Estate Agents)

London, W1

15 December