Meeting Today's Security Challenges

Suggested actions to manage the business interruption risk.

Riot police during a strike protest in Santiago, Chile.

Europe will look back on 2016 as a year with significant security challenges. There have been attacks in Paris, Brussels, Nice, Berlin, and Istanbul, and the list of cities targeted by terrorists continues to grow. Indeed, in March 2017 we have witnessed an attack in London. Although research shows a reduction in the levels of global terrorism, the continued intensification of terrorism in some countries is a concern, and highlights the fluid nature of modern terrorist activity. Whether carried out by “sleeper cells” or so-called “lone wolves”, some experts have noted a marked shift to attacks aimed at soft targets in the past few years.

With atrocities having already taken place in major shopping destinations such as Paris and the Côte d'Azur, attacks on retail and leisure destinations are becoming more common. A heightened threat to European transport and tourism infrastructure has resulted in reduced visitor numbers and an associated slowdown in travel and consumer spending. In this changing arena, food processing, storage, and distribution facilities may also face this new threat, as they are vulnerable to intentional contamination.

Despite the tragic cost to human life and suffering, these attacks typically cause minimal direct damage to property, but can bring indirect costs through business interruption. The changing patterns of terrorism risk have some companies questioning whether they are adequately prepared for business interruption and related losses.


The potential cost of property damage from an attack can be outweighed by business interruption costs. For example, if a city or region were put under a curfew, if businesses were closed indefinitely, or if travel through a major hub was disrupted, how would your business manage?

Terrorist attacks can result in significant business interruption losses for businesses. We suggest you consider the following actions to take to manage business interruption risk:

  • Test various loss scenarios that could have direct or indirect impacts on your business.
  • Develop and test an overall framework for management, response, and recovery.
  • Develop and test business continuity plans for continuing or resuming operations, and recovering partially or completely interrupted critical business functions.
  • Be prepared to gather appropriate information in the event of a claim, including recording damage via photographs and video. Maintain separate accounting codes to identify all costs associated with the potential damage.
  • Review property and business interruption insurance to ensure you have the appropriate extensions, including non-damage denial of access and loss of attraction.
  • Coordinate business interruption insurance with other coverages, including political violence and terrorism insurance.

Terrorist attacks are a harsh reminder of the need to develop, maintain, and exercise corporate level plans, allied with customised property and business interruption insurance for crisis management and business continuity. Integrated and well-practiced crisis and continuity plans can help you to be risk-ready should a crisis occur.