German govt to provide up to €10bn cover for terrorism risks

The German government is ready to provide up to €10bn to provide coverage against terrorism risks in the planned joint venture between private insurance companies and the state, the finance ministry said.

It said the new terrorism insurance company will have a capacity of €13bn cover of terror risks, with €3bn coming from private insurance companies and the rest from the state.

It said the state will only make pay outs when the claims resulting from a single event exceeds the €3bn covered by the private insurance companies.

The government will also receive a proportion of the premiums. The agreement has a time limit of three years, it said.

The new company will provide cover against damage to buildings caused by terrorist attacks as well as business interruption claims.

It aims to make sure companies take out proper insurance against terrorism risks after the Sept 11 attacks on the US.