NBCR terrorism
An act of terrorism using nuclear, biological, chemical or radiological weapons, excluded from almost all private policies because its potential accumulation exceeds the market's capital.
NBCR terrorism, or CBRN in common English usage, refers to an act of terrorism using nuclear, biological, chemical or radiological agents. It differs from conventional terrorism through three features that make it nearly uninsurable in the private market. Its potential severity has no practical bound: radiological or biological contamination of a city center would make intact property unusable for an indefinite period. Its damage escapes the categories of the policy: contamination is not always physical damage, and the decision to close an area rests with public authorities. And there is no history on which to base pricing. Insurers therefore exclude it almost everywhere, even when they cover conventional terrorism, and cover, where it exists, relies on the state. The United Kingdom brought it into its public scheme in the early 2000s. In the United States, the federal program does not require insurers to offer NBCR cover where state law allows it to be excluded. For the underwriter, it is the very example of a risk whose cost, however rare, exceeds what a market can pool.
The sarin attack carried out by the Aum Shinrikyo sect on the Tokyo subway on March 20, 1995 killed thirteen people and injured thousands with a few liters of a crudely made chemical agent. It remains the reference for NBCR scenarios precisely because a purer agent, better dispersed, would have produced losses on an entirely different scale.
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