Most UK residential blocks of flats do not have terrorism cover included as standard. Standard buildings insurance policies typically exclude it, and you will only have protection if it has been explicitly added, usually through Pool Re (Pool Reinsurance Company Ltd) or a standalone commercial terrorism policy. If your block carries a mortgage or if the lease requires terrorism cover, the absence of it is not just a gap, it is a potential breach.
Before your next renewal, do two things:
- Pull out your current policy schedule and check whether terrorism appears as a named exclusion or a named peril. If it is absent from the covered perils list, you almost certainly do not have it.
- Review your mortgage deed and the building’s lease. Lenders and leases increasingly require terrorism cover, particularly for taller or higher-value blocks.
A RICS rebuild cost assessment is the single most useful document you can supply to a broker when arranging terrorism cover. It produces an accurate sum insured, which directly affects both the premium and the adequacy of any claim settlement.
Key takeaways
Terrorism cover for UK residential blocks is excluded by default from standard buildings insurance, and the consequences of that gap are most acute when a lender or lease requires it.
| Point | Details |
|---|---|
| Standard policies exclude terrorism | Check your policy schedule for a terrorism exclusion or the absence of a Pool Re endorsement. |
| Pool Re is the standard UK route | Most residential blocks use Pool Re, the government-backed reinsurance scheme, to restore terrorism cover. |
| Lenders and leases can make it compulsory | Review your mortgage deed and lease before renewal — absence of cover can block remortgage or sale. |
| Cost is typically £50–£300 per year | Small-to-medium blocks outside central London usually fall within this range for a Pool Re placement. |
| Flatinsurance arranges specialist cover | Flatinsurance reviews policy wordings, places Pool Re cover and procures RICS rebuild cost assessments for residential blocks. |
Table of Contents
- What terrorism insurance is and how it differs from standard buildings cover
- Does your standard block buildings insurance include terrorism cover?
- What terrorism insurance for a residential block typically covers
- Is terrorism cover compulsory for blocks of flats in the UK?
- How much does terrorism cover cost for a residential block?
- Common exclusions and red flags to check in policy wordings
- How to arrange terrorism cover for your block: a practical checklist
- What to expect if you need to make a terrorism claim
- When terrorism cover matters most for UK blocks: market context
- Why specialist advice makes a real difference for block terrorism cover
- Terrorism cover for your block: how Flatinsurance can help
- Sources
What terrorism insurance is and how it differs from standard buildings cover
Terrorism cover is a separate insurance product, or a specific add-on, that pays for physical damage and associated losses caused by an act of terrorism. Standard buildings insurance is designed for fire, flood, storm, escape of water and similar perils. Terrorism is almost universally carved out of those policies by a specific exclusion clause, which means a bomb, vehicle attack or arson with a terrorist motive would leave you without a valid claim on a standard policy.
Pool Re is the government-backed reinsurance scheme that sits behind most UK terrorism insurance placements. It was established in 1993 following IRA bombings in the City of London that caused losses the commercial market could not absorb. Under the Pool Re model, your insurer writes the terrorism cover and then reinsures the risk with Pool Re, which in turn has a government guarantee. For most residential blocks, Pool Re is the standard route. It covers physical damage caused by terrorism within Great Britain, and the cost is typically passed back to the block through the service charge as a normal buildings insurance item.
On a policy schedule, you will usually see terrorism cover either listed as a named peril (confirming it is included) or referenced as “Pool Re terrorism extension” in the endorsements section. If neither appears, the cover is not there.
Does your standard block buildings insurance include terrorism cover?
Almost certainly not by default. The TPI advises managing agents to treat terrorism as an exclusion unless the schedule explicitly says otherwise. Here is how to check quickly:
- Policy schedule: Look for terrorism in the list of insured perils. If it is not there, check the exclusions section — it will almost certainly appear there instead.
- Definitions section: Some policies define “damage” in a way that excludes acts of terrorism by definition, rather than by a separate exclusion clause. Read the definition of “damage” or “insured event” carefully.
- Pool Re reference: Any endorsement or schedule entry referencing Pool Re confirms terrorism cover has been added. No Pool Re reference usually means no terrorism cover.
If terrorism is excluded, the next steps are straightforward. Ask your broker for a Pool Re quotation at the next renewal. At the same time, pull out the mortgage deed and the lease to check whether either document requires terrorism cover to be in place. If they do, you need to act before renewal rather than at it.
What terrorism insurance for a residential block typically covers
The core elements of a terrorism policy for blocks of flats are broadly consistent across the market, though limits and indemnity periods vary considerably between insurers.
| Cover element | Typical policy behaviour |
|---|---|
| Physical damage to the building | Covered — reinstatement or repair to the sum insured |
| Loss of rent | Covered — subject to an indemnity period (commonly 24 months) |
| Denial of access | Conditional — many policies require physical damage to trigger this |
| Alternative accommodation | Covered — costs for displaced residents during reinstatement |
| Public liability | Covered — third-party injury or property damage arising from the event |
| NCBR (nuclear, chemical, biological, radiological) | Often excluded unless specifically added |
| Cyber-triggered losses | Excluded on most standard terrorism wordings |
Loss of rent is measured from the date the building becomes uninhabitable or partially uninhabitable, up to the end of the indemnity period. Getting the indemnity period right matters: a major reinstatement on a large block can take three years or more, and a 12-month indemnity period would leave the freeholder or RMC exposed for the remainder.
Denial of access cover is worth scrutinising closely. Some wordings pay out only if there is physical damage to the insured property itself. Others extend to cover loss of rent or additional costs when access is denied by a public authority, even without direct damage. The difference can be significant in a cordon scenario.
Pro Tip: Always check the indemnity period for loss of rent against the realistic reinstatement time for your block. A RICS rebuild cost assessment will give you a reinstatement period estimate alongside the rebuild figure — use both when reviewing your terrorism policy limits.
Is terrorism cover compulsory for blocks of flats in the UK?
There is no statute that legally compels a freeholder or RMC to hold terrorism cover. The obligation, when it exists, comes from two other sources: mortgage conditions and lease terms.
Mortgage conditions are the more common trigger. Many lenders, particularly those with exposure to higher-value or taller blocks, include a clause in the mortgage deed requiring the borrower to maintain terrorism cover. If that cover lapses or was never in place, the lender can treat it as a breach of the mortgage conditions. At remortgage or sale, a solicitor’s enquiry will surface the gap, and it can delay or block the transaction.
Lease terms sometimes require the freeholder to maintain “full reinstatement” cover, which some leases define in a way that encompasses terrorism. The Qdime case and similar leasehold disputes have reinforced that freeholders and RMCs can face liability to leaseholders if the building is inadequately insured and a loss occurs. Checking the lease wording is not optional if you are responsible for arranging the block’s insurance.
For blocks in central London or other high-footfall urban areas, the practical expectation from lenders has shifted. Post-Grenfell and following several high-profile urban attacks, lenders increasingly treat terrorism cover as a best-practice expectation for taller or higher-value blocks. Even where it is not contractually required, the absence of cover is harder to justify to a board or a leaseholder body.
The cost of terrorism cover can be recovered through the service charge as a normal buildings insurance item and does not typically engage Section 20 consultation requirements.
How much does terrorism cover cost for a residential block?
For most small-to-medium residential blocks, terrorism cover costs in the region of £50–£300 per year, depending on the sum insured, location and building height. That range covers the majority of standard Pool Re placements for blocks outside central London. For larger, taller or centrally located buildings, premiums will be higher, and the underwriting process more detailed.
The primary factors that drive the premium are:
- Sum insured / rebuild cost: The higher the rebuild value, the higher the premium. An accurate RICS rebuild cost assessment prevents both overpaying and underinsuring.
- Location: Central London, major city centres and areas near landmarks or transport hubs attract higher rates. A block in a rural market town sits at the lower end of the range.
- Building height and construction: Taller buildings and those with unusual construction types (timber frame, cladding) are rated more carefully.
- Occupancy: Residential-only blocks are generally rated more favourably than mixed-use buildings.
- Security measures: CCTV, access control and concierge arrangements can support a lower rate. Property risk management measures are worth documenting when submitting to underwriters.
- Claims history: Any prior terrorism or major property claims will be scrutinised.
WTW notes that Pool Re pricing applies to most standard residential placements, but standalone commercial policies may be more appropriate where a block needs NCBR extensions, unusual territorial cover, or where the Pool Re scope does not match the risk profile.
Pro Tip: When approaching a broker for terrorism quotes, supply the RICS rebuild cost figure, a site plan or address, building height in storeys, occupancy type and a list of any lenders with a charge over the property. That package produces a meaningful quote rather than an indicative one.
Common exclusions and red flags to check in policy wordings
Terrorism policies for residential blocks carry several standard exclusions that regularly catch managing agents off guard at claim time.
Standard exclusions to expect:
- War and civil war: Distinct from terrorism and excluded on all standard terrorism policies.
- NCBR (nuclear, chemical, biological, radiological): Excluded by default on most Pool Re placements unless a specific NCBR extension is purchased.
- Cyber-triggered terrorism: An attack that causes physical damage via a cyber mechanism is excluded on most standard wordings. Standalone cyber terrorism cover exists but is rarely included in residential block policies.
- Non-damage denial of access: If the policy requires physical damage to the insured property before denial of access cover triggers, a cordon imposed because of a nearby incident will not be covered.
- Territorial limits: Pool Re covers Great Britain. Northern Ireland is outside Pool Re’s scope. Blocks in Northern Ireland require a separate commercial terrorism arrangement.
Red-flag wording items to query with your broker:
- How is “act of terrorism” defined? Some definitions require certification by the Secretary of State; others use a broader functional definition. The certification requirement can delay claims.
- Does the denial of access clause require physical damage to the insured property, or does it extend to authority-imposed cordons?
- Are there sub-limits on loss of rent or alternative accommodation that are lower than the main sum insured?
- What is the indemnity period for loss of rent, and does it match the realistic reinstatement timeline?
- Are aggregation clauses in play? Some policies aggregate multiple terrorism events in a policy year under a single limit.
Practical Law’s guidance on terrorism reinsurance is a useful reference for brokers and legal teams reviewing wording nuances, particularly around certification and the interaction between the insurer’s policy and Pool Re’s reinsurance terms.
How to arrange terrorism cover for your block: a practical checklist
This sequence works for RMCs, freeholders and managing agents approaching renewal or responding to a lender query.
- Check the current policy schedule. Confirm whether terrorism is listed as a covered peril or as an exclusion. Note the policy expiry date.
- Review the mortgage deed and lease. Look for any clause requiring terrorism cover or “full reinstatement” insurance. Note the lender’s name and the specific clause wording.
- Obtain a RICS rebuild cost assessment. If the current valuation is more than three years old, commission a new one. Underinsurance on a terrorism claim carries the same consequences as on any other claim — a proportional reduction in the settlement.
- Compile the broker submission pack. Include: building address and postcode, number of storeys, total floor area, construction type, occupancy (residential only or mixed use), current sum insured, lender names and any mortgage deed extracts, security measures in place, and any previous claims.
- Ask your broker for a Pool Re quotation and, where relevant, a standalone commercial alternative. A specialist broker with block experience will know which insurers offer Pool Re placements for residential blocks and can check whether a standalone policy is worth considering for your specific risk profile.
- Compare the quotes against your lease and lender requirements. Confirm the territorial scope, the definition of terrorism, the denial of access trigger and the indemnity period before accepting.
- Confirm cover at renewal and notify leaseholders. Update the insurance schedule and, where the lease requires it, issue a certificate of insurance or summary of cover to leaseholders. Record the decision in the board or committee minutes.
For RMCs working through this process for the first time, Flatinsurance’s guide for RMCs covers the broader insurance obligations alongside terrorism cover. A specialist broker adds real value here: checking lender clauses, producing accurate rebuild cost evidence and negotiating Pool Re placements at renewal are steps that materially reduce the risk of a loan refusal at remortgage, as TPI’s guidance makes clear.
What to expect if you need to make a terrorism claim
Speed and documentation are the two things that determine how smoothly a terrorism claim proceeds.
Immediate actions:
- Evacuate and secure the building in line with emergency services instructions.
- Do not re-enter until the police or fire service confirms it is safe.
- Notify your insurer’s claims line as soon as it is safe to do so — most policies require notification within 24–48 hours of an incident.
- Photograph and video the damage before any emergency repairs, and preserve any physical evidence where safe.
- Keep records of all emergency expenditure (temporary accommodation, emergency contractors, security boarding).
Documents to have ready:
- Current policy schedule and certificate of insurance
- Most recent RICS rebuild cost assessment and sum insured confirmation
- Service charge accounts and budget (to evidence loss of rent and service charge income)
- Tenancy agreements or occupancy records for all flats
- Photographs of the building pre-incident (from any recent survey or inspection)
- Contractor estimates for emergency and reinstatement works
For large or complex events, Pool Re operates a certification process. The insurer submits the claim to Pool Re, which certifies whether the event qualifies as an act of terrorism under the scheme’s rules. This certification step can add time to the process, particularly where the nature of the incident is disputed or under police investigation. Keeping detailed contemporaneous records from day one protects the claim throughout that process.
When terrorism cover matters most for UK blocks: market context
The market’s attitude to terrorism cover for residential blocks has shifted noticeably over the past decade. Taller blocks, high-value conversions and buildings in central London now face a more consistent expectation from lenders that terrorism cover will be in place. That shift is partly driven by post-Grenfell scrutiny of building safety and insurance adequacy more broadly, and partly by the pattern of vehicle and device attacks in UK city centres since 2017.
A typical scenario: a managing agent arranging renewal for a 24-flat block in a central London borough receives a query from a lender whose client is attempting to remortgage. The lender’s solicitor flags that the current buildings policy does not include terrorism cover and requests evidence that it will be added at renewal. The managing agent contacts a specialist broker, who obtains a Pool Re quotation, confirms the territorial scope and definition of terrorism, and issues a certificate of insurance to the lender before exchange. The additional premium is recovered through the service charge at the next accounting period.
The decision about whether to add terrorism cover should sit with the freeholder or the RMC board, not with the managing agent acting unilaterally. For RMCs and RTM companies, recording the decision in board minutes and communicating it to leaseholders is good governance. For freeholders with a managing agent, the instruction should be in writing. Guidance for freeholders and RMCs on broader insurance obligations is worth reviewing alongside this.
Why specialist advice makes a real difference for block terrorism cover
The gap between a standard buildings policy and a properly structured terrorism cover arrangement for a residential block is not just about adding a line to the schedule. It is about wording, limits, lender compliance and rebuild accuracy working together.
General brokers often place terrorism cover as an afterthought at renewal, without checking whether the denial of access trigger matches the block’s risk profile, whether the indemnity period is long enough, or whether the sum insured reflects a current RICS rebuild cost. Those gaps only become visible at claim time, which is the worst moment to discover them.
Specialist broking for blocks of flats means those checks happen before the policy is bound. Lender clauses are reviewed, not assumed. The rebuild cost is verified, not carried forward from three years ago. The Pool Re placement is confirmed as appropriate, or a standalone alternative is considered where the risk profile warrants it. For most blocks, terrorism cover is genuinely affordable relative to the financial exposure of an uninsured event. The cost of getting the wording wrong is orders of magnitude higher than the cost of getting specialist advice.
Terrorism cover for your block: how Flatinsurance can help
Flatinsurance specialises exclusively in insurance for residential blocks of flats, which means terrorism cover is not a bolt-on afterthought — it is a core part of what we review for every client.
We will review your existing policy schedule and check your lender and lease requirements at no obligation. Our in-house RICS Chartered Surveyors can procure a rebuild cost assessment to ensure your sum insured is accurate before any terrorism quote is sought. Where Pool Re is the right route, we place it. Where a standalone commercial policy better fits the risk, we will tell you why and provide both options.
- Policy wording check: We review your current schedule for terrorism exclusions and identify any gaps against lender or lease requirements.
- Pool Re placement: We arrange Pool Re terrorism cover as part of your block buildings policy renewal.
- RICS rebuild cost procurement: We provide professional rebuild cost assessments through our in-house surveyors, giving underwriters the accurate figures they need.
Get a quote for your block and let us check whether your terrorism cover is in place, correctly worded and adequate for your lenders and leaseholders.
Sources
These official and sector resources are worth consulting when arranging terrorism cover or preparing to seek quotes:
- Terrorism Cover for a Block of Flats: Pool Re, Lenders, Cost | Building Trust
- Uk
- Does your block have the correct terrorism cover? – TPI
- Terrorism insurance: What’s right for your real estate business? – WTW
This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.