On 12 October 2012, survivors of the 2002 Bali bombing, along with families of those who died, gathered to mark the 10th anniversary of the attacks. The double suicide bombing destroyed two popular nightclubs on the Indonesian island, killing 202 people – many of them expatriates and tourists – in an act the perpetrators said was part of a jihad ‘to defend the people of Afghanistan from America’, as the island ‘was frequented by Americans and their associates’. Three of the perpetrators were executed in Indonesia in 2008, a number of others were killed or jailed, and a man known as Hambali, who is believed to have masterminded the attacks, is currently in custody in Guantanamo Bay.
The incident threw travel insurance provision for terrorist incidents into the spotlight, revealing that many policies provided only limited cover for policyholders in the event of a terrorist attack. As so many of those injured in Bali nightclub attacks were Australian, the government swiftly took action to repatriate survivors onboard commercial jets, as well as flying medical supplies and medics into Bali to help treat the injured. Indonesian airline Garuda also performed repatriations of tourists to their home nations. Such governmental intervention meant that travel insurance and assistance companies did not shoulder a great deal of the burden nor the cost of such flights, or the medical care necessary for many of the victims.
At the time, ITIJ asked if it was time for insurers to re-think their terrorist attack cover provision with a specialist policy available for high-risk countries. While that hasn’t happened, several changes in the industry have, for the most part, brought terror cover levels up to par with the rest of the policy. The events of 9/11 saw many travel insurers issue blanket terrorism exclusions on their policies, but following acts of terror Bali in 2002, Sharm el Sheikh in 2005 and the hotel bombings in Mumbai in 2008, the industry realised it had to step up to the challenge of covering tourists who were caught up in such incidents.
In 2005, Graeme Trudgill, then technical services manager for the British Insurance Brokers’ Association (BIBA), said that there were ‘a very limited number of policies’ in the market that covered acts of terrorism, but by 2010, when the UK government agreed to compensate victims of terrorism abroad, he noted: “We are … very pleased that many travel insurers, over the last four years, have agreed to include terrorism cover in their travel insurance policy wordings. However, we estimate that about a third of policies still do not have any terrorism protection at all. We urge insurers to include this cover as soon as possible because travellers will rely on their insurer helping them if they are caught in a terrorism incident abroad.”
In 2001, the Association of British Insurers found that 60 per cent of policies available to consumers offered cover for terrorist incidents.