If December’s siege in Martin Place is labeled an act of terror, retailers whose Christmas earnings were slashed as a result of the incident may receive smaller insurance payouts.
Legislation which was passed after the September 11 attacks means federal Treasurer Joe Hockey can step in and declare certain events as acts of terrorism and limit insurers’ losses.
If that happens, the Australian Reinsurance Pool Corporation (ARPC), a federal organisation, can assess the likely loss from the event and if necessary, lower insurers’ liabilities. The legislation was aimed at protecting insurers from huge losses and ensure they continue to insure businesses.
On December 15, a significant portion of the Sydney CBD was put in lock-down when gunman Man Horan Monis took 17 people hostage in the Lindt Cafe at Martin Place. The siege, which lasted into the early hours of the following day, claimed the lives of cafe manager Tori Johnson and lawyer Katrina Dawson. Monis was also shot dead when police stormed the building.
A number of retailers have claimed they incurred earnings drops of up to 70% during the tragic event and have lodged claims with their insurers. Even on Christmas eve, Sydney’s shops were visibly quiet with some shopkeepers pointing to the siege as the reason for less shoppers.
The ARPC said the incident is “being investigated by the relevant authorities”. However, it has requested insurers notify it of claims and preliminary estimates of all losses likely to be incurred.
According to the SMH, it is likely the Government will declare the event an act of terrorism.
A spokesperson for the Treasurer said they had been talking to insurers and monitoring the situation. A decision on the definition is expected in coming weeks.
There’s more here.
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