Sabotage and terrorism policy (S&T)

After September 11, 2001, property policies dropped terrorism almost everywhere, and Lloyd's built a standalone market to write it back: the sabotage and terrorism policy, most often written on the T3 wording (LMA 3030). It is the first tier of political violence. It responds to physical damage caused by an act of terrorism or sabotage, with optional business interruption flowing from that damage, and to nothing else: no riot, no strike, no insurrection, no war. For an office portfolio in London, Paris or New York, where riot stays inside the property policy, that tier is often enough. A buyer operating in Chile, Thailand or Nigeria moves up to full political violence. The steps stack up: SRCC (strikes, riots, civil commotion) and malicious damage, then insurrection, revolution, rebellion, mutiny and coup d'etat, and finally war and civil war. Each step widens the possible accumulation, from one neighborhood to a whole country. The S&T underwriter thinks in a radius around a point of impact, because a bomb hits a street, whereas a riot can burn a city over several days. Standard exclusions target NBCR (nuclear, biological, chemical, radiological) weapons, cyber attack and non-damage business interruption, such as police closing off a district. Where a pool exists (Pool Re, GAREAT, TRIA), the S&T policy sits on top or on a difference-in-conditions basis, and the pool's own wording decides what is left to cover.

• Lloyd's Market Association, LMA 3030, Terrorism Insurance Physical Loss or Physical Damage Wording (T3)