Terrorism insurance for commercial property in Singapore
Why the fire policy excludes terrorism
Property insurers removed terrorism from standard wordings after 2001. The exclusion is now in every Singapore fire and property all risks policy. It defines terrorism as an act, including the use of force or violence, by a person or group acting for political, religious, ideological or similar purposes, intended to influence a government or put the public in fear.
The exclusion applies to the act itself and to any loss arising from steps taken to control or prevent it. A fire started by a bomb is excluded from the fire policy even though fire is the insured peril. The cause overrides the result.
Cover is restored in 1 of 2 ways. A terrorism extension to the property policy, underwritten by the same insurer or a specialist behind it. Or a stand-alone terrorism policy from a specialist market, with its own wording and limit. One bank-distributed programme describes its terrorism section as covering property damage and business interruption from acts of terrorism or civil commotion, for operational risks and properties under construction. Lloyd's lists terrorism among the classes it writes from its Singapore platform.
Terrorism, sabotage, political violence and active assailant
The specialist market sells 4 related covers. The names overlap in conversation and differ in wording.
| Cover | What it pays for | Who buys it |
|---|---|---|
| Sabotage and terrorism | Physical damage and BI from an act of terrorism or sabotage | Most commercial property owners and tenants |
| Political violence | Adds riots, strikes, civil commotion, insurrection, rebellion, coup and war on land | Owners with regional portfolios or exposure in less stable markets |
| Terrorism liability | Legal liability to third parties injured or whose property is damaged in an attack at the insured's premises | Venues, malls, hotels, landlords |
| Active assailant | Costs after an armed attack: medical, counselling, crisis response, BI, regardless of motive | Schools, hospitality, retail, offices with public access |
Active assailant cover answers a definitional gap. An attack by a lone individual with no political motive is not terrorism under the standard definition. The property policy excludes it as a malicious act only if that extension is absent, and the terrorism policy may not respond. Active assailant cover pays on the event, not the motive. One insurer's Singapore appetite sheet lists terrorism liability and active assailant cover at up to US$250 million capacity.
Business interruption after an attack
Physical damage is the visible loss. The larger loss for most tenants is the closure that follows. Terrorism business interruption pays lost gross profit or increased cost of working while the premises are repaired, for the indemnity period chosen.
Denial of access is the second trigger to check. After an incident the police cordon an area for days or weeks. A business outside the damage zone but inside the cordon loses revenue with no damage to its own premises. Standard terrorism BI requires damage at the insured location. A denial of access or prevention of access extension pays when the authorities close the area, subject to a radius and a time excess. The broker confirms both figures.
Loss of attraction is the third. A mall that reopens after an attack trades at a fraction of its previous footfall for months. Cover for it is scarce and sub-limited. See business interruption indemnity period for how the indemnity period is set.
Landlord cover and tenant cover
A landlord's terrorism policy insures the building. It does not insure the tenant's fit-out, stock, equipment or revenue. A tenant whose lease requires the landlord to insure the building still needs its own cover for everything inside the walls and for its own business interruption.
The reverse also applies. A tenant that insures its contents against terrorism has no cover for the months the landlord takes to rebuild. The tenant's BI policy must carry the terrorism extension and an indemnity period long enough for a full reconstruction, not a refit.
Leases in Singapore often oblige the tenant to insure contents and public liability but are silent on terrorism. The broker reads the lease insurance clause and the landlord's policy before setting the tenant's programme. See commercial property insurance for the base policy.
Who buys it in Singapore
Published insurer appetite lists the sectors that buy terrorism cover as standard:
- Hotels, serviced apartments and hospitality venues.
- Shopping malls and retail chains with public access.
- Media and broadcasting premises.
- Infrastructure, utilities and transport operators.
- Financial institutions and data centres.
- Schools and universities.
- Buildings under construction, where the contractors' all risks policy carries the same exclusion.
Lenders are the other driver. A mortgage over a commercial building commonly requires the borrower to insure against terrorism, because the lender's security is the building. The facility letter names the cover, and the broker evidences it with a certificate at drawdown and each renewal.
Property insurance claims in Singapore rose 60.5% in 2025 on premiums of S$864.1 million. Terrorism was not the cause, but the figure shows how one large loss moves a whole class. Terrorism is the class where the single large loss is the entire point.
What moves the price
No premium is quoted here. Terrorism underwriters price a building or portfolio on:
- Location: proximity to government buildings, transport hubs, embassies, iconic sites.
- Occupancy and public access: a mall rates above a warehouse of the same value.
- Total sum insured for property damage and BI, and the indemnity period.
- Construction and security: glazing, stand-off distance, access control, CCTV.
- Extensions: political violence, denial of access, loss of attraction, liability, active assailant.
- Deductible, often set as a percentage of the loss with a minimum.
Capacity is abundant in Singapore because the loss record is clean. That keeps rates low relative to the sum insured, and it is the reason the cover is often bought for the full property value rather than a first-loss limit.
Frequently asked questions
Is terrorism excluded from my fire policy?
Yes. Every standard Singapore fire and property all risks wording excludes loss from terrorism and from steps taken to prevent or control it. Cover is restored by a terrorism extension or a stand-alone terrorism policy, each with its own limit.
What is the difference between terrorism and political violence cover?
Terrorism cover responds to acts with a political, religious or ideological motive intended to influence a government or frighten the public. Political violence adds riots, strikes, civil commotion, insurrection, rebellion, coup and war on land. The wider wording costs more and matters most for regional portfolios.
Does a landlord's terrorism cover protect tenants?
No. It insures the building for the landlord. The tenant's fit-out, stock, equipment and lost revenue need the tenant's own terrorism extension, with an indemnity period that covers a full reconstruction of the building.
Is denial of access covered?
Not under base terrorism BI, which requires damage at the insured premises. A denial of access or prevention of access extension pays when the authorities close the area around an incident, within a stated radius and after a time excess. Both figures should be checked against the premises' location.
Sources
General information only, not advice on any particular policy. Cover depends on the policy wording and the insurer's terms.