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Canada’s terrorism insurance industry dates back to 2001

by Josh Dehaas

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Canada has one of the lowest risks of terrorism in the Western world, according to the recently published 2010 Terrorism Risk Index. Yet this year was also one of the busiest on record for those offering insurance against terrorism, according to Marsh Canada, the country’s largest insurance broker offering terror coverage.

Canada’s terrorism insurance industry dates back to 2001, when the Sept. 11 attacks on the World Trade Center cost insurers $40 billion. After that, most insurance companies in the Western world excluded acts of terrorism from their coverage. The U.S. and the U.K. responded by promising to back companies that continued to offer terrorism coverage as part of their regular policies. Canada (with the exception of a temporary reprieve for the airline industry) did not follow their lead. That meant worried companies had to find their own stand-alone insurance. Following Sept. 11, just over a quarter of Marsh’s clients bought the insurance.

Then, in 2006, news broke of the plot by the so-called “Toronto 18” to attack downtown Toronto and Parliament Hill. “Right after they were busted, we got a lot more uptake,” says Marsh’s terrorism expert Daniel Galvao. Forty-nine per cent of Marsh’s clients bought terrorism insurance in 2006—the most ever. Then companies became less cautious again. By 2008, just a third were buying policies. However, since then, purchases of terrorism insurance have increased again. Marsh estimates 15 per cent more of their clients bought coverage in 2010 than they did two years ago.

That’s not because there’s more terrorism activity, but because two high-profile events were held in Canada—February’s Vancouver Olympics and June’s G20 summit in Toronto. In fact, there was so much demand for coverage during the G20 summit that Marsh couldn’t find enough insurers to take on all the risk. Another sector where companies are concerned today is the energy industry, says Galvao. Terrorists could bomb gas pipelines in the West or transmission lines in the East which feed the U.S.  “If you turn off the taps in the middle of the winter, you have very serious consequences.”




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  1. Canada has not had a problem with terrorism since the FLQ in the 1960s and 1970s, and that was mostly in Quebec. However, while Canadians shouldn't give in to paranoia, we shouldn't get too complacent either. The fact that 65 of the victims of the terrorist attack in Mumbai in 2008 were Canadian citizens has provoked very little interest in this country, I think. And Canadians barely yawned when a Sikh extremist blew herself and kill every passenger aboard that Air India flight in 1983. Many of the dead in that attack were Canadian citizens, too.

    We have been very lucky that no one has blown up the CN Tower in Toronto or the Souterrain in Montreal. Let's hope that our good luck doesn't run out.

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