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Terrorism Insurance – Explained

What is the ARPC – the Australian Reinsurance Pool Corporation?

ARPC is a statutory authority established by the Terrorism Insurance Act 2003, to administer the terrorism reinsurance scheme, providing primary insurers with reinsurance for commercial property and associated business interruption losses arising from a declared terrorist incident.

The Scheme

ARPC’s reinsurance scheme was established after discussions with key industry stakeholders, including insurance and reinsurance companies, banks, representatives of property owners, industry associations, insurance brokers and actuaries.

Through the scheme, insurance companies can choose to reinsure the risk of claims for eligible terrorism losses by paying premiums to ARPC. Consequently, holders of eligible insurance contracts will be covered in the event of a declared terrorist incident (DTI), with insurers required to meet these claims in accordance with the other terms and conditions of individual policies.

Claims against the scheme are met once an individual insurance company’s risk retention is exhausted. ARPC’s pool of retained earnings will meet claims until the agreed retrocession deductible is reached. At this point claims are funded by the retrocession program, of which ARPC is a participant through co-reinsurance. Once retrocession is exhausted, claims will continue to be met by the Commonwealth guarantee.


In 2003, in the aftermath of the terrorist attacks in the United States and following the withdrawal of terrorism insurance cover by insurance companies, the Australian Government established a scheme for replacement terrorism reinsurance. The scheme was introduced as a result of calls for the Government to intervene in an area of clear market failure and after discussions with key industry stakeholders.

ARPC is a statutory authority established by the Terrorism Insurance Act 2003 to administer Australia’s terrorism reinsurance scheme and provide terrorism reinsurance for commercial property, associated business interruption losses and public liability claims.

Basis of the Scheme

The Government decided that any intervention should be consistent with the need to:

  • maintain, to the greatest extent possible, private sector provision of insurance;
  • ensure that risk transferred to the Commonwealth is appropriately priced to minimise the impact on the Commonwealth’s financial position;
  • ensure that the Commonwealth is being compensated by those benefitting from the assistance;
  • allow the commercial insurance and reinsurance markets to re-enter the terrorism market when they are able;
  • be compatible with global solutions.

How the Act Works

The Act overrides terrorism exclusion clauses in eligible insurance contracts to the extent the losses excluded are eligible terrorism losses arising from a declared terrorist incident.

The Act makes terrorism exclusion clauses ineffective for all classes of insurance included in the scheme. This requires insurers to meet eligible claims, in accordance with the other terms and conditions of their policies.

The Act applies to all eligible insurance contracts issued by Australian or offshore insurers. Insurance companies may reinsure their terrorism risk exposure with ARPC.

Review of the scheme

The Act requires that a review of the need for the scheme to continue in operation must be undertaken every three years. Reviews were conducted in 2006, 2009 and 2012. The 2012 review made the following recommendations:

  • the Act continue in operation, subject to a further review within three years;
  • premiums continue to be collected at the current rates;
  • industry retention levels remain unchanged;
  • ARPC is to re-examine the issue  of extending the scheme to mixed use, high rise buildings that are not predominantly for commercial use;
  • ARPC pay a dividend to the Commonwealth of $400 million over four years.

What Does This Mean for your Business Insurance Coverage?

A common inclusion on your policy schedule would read as follows:

XYZ Insurance Compnay has determined that this policy (or part of it) is a policy to which the Terrorism Insurance Act 2003 applies. We have reinsured our liability under the Act with the Commonwealth Government reinsurer, the Australian Reinsurance Pool Corporation (ARPC). As a consequence, we are required to pay a premium to the ARPC and that amount (together with the cost of that part of the cover provided by us and administrative costs associated with the  legislation) is reflected in the premium charged to you.

*This is normally included in Base Premium, and might amount to 1% of Base Premium.


This is Overriden by the Insurers Inclusion within the scheme, and for which you are therefore covered :

Notwithstanding anything contained in this Policy or any endorsement attached to the contrary it is agreed that this Policy excludes death, injury, illness, loss, damage, liability, cost or expense directly or indirectly caused by, contributed to by, resulting from or arising out of
or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to  intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organisation(s) or government(s) de jure or de facto, and which: 1) involves violence against one or more persons; or 2) involves damage to property; or 3) endangers life other than that of the person committing the action; or 4) creates a risk to health or safety of the public or a section of the public; or 5) is designed to interfere with or to disrupt an electronic system.

This Policy also excludes death, injury, illness, loss, damage, liability, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any act of terrorism.


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Childcare & Community Insurance

Childcare Insurance with Statewide

Statewide first placed Childcare Insurance in March of 1988, and since then we have been known as the Childcare Insurance brokerage in Western Australia.

Today we continue our long-standing relationship with the WA childcare industry, and continue to be at the forefront of insurance solutions in the childcare insurance sector.

We have recently undertaken an extensive review of our ChildCare facility and are pleased to announce our exclusive terms with Ansvar Insurance.

 Why have We Selected Ansvar?

  • Competitive and consistent premiums.
  • Broadest available covers – our policies are designed specifically for the Childcare Industry and are fully inclusive.
  • Exclusive to Statewide – no other broker has access to this facility.

Our packages are tailored to suit the industry, particularly from a Liability Insurance component, covering the unique liability aspects of Childcare business.  We insure hundreds of Childcare Centres throughout WA, and continue to be well known and highly regarded throughout the industry.

We Cover any Childcare or Community Care based business:

  • General Child Care
  • Long day care
  • Outside school hours care
  • Before and after school care
  • Vacation care
  • Pre-school
  • Kindergarten
  • Playgroup
  • Mobile children’s service
  • Family day care
  • In-home care
  • Nanny
  • Home based care
  • Babysitter
  • Mothercraft nurse
  • Mother’s helper
  • Housekeeper, nanny

Business Pack Inclusions:

  • Property/Fire/Perils/Accidental Damage
  • Business Interruption
  • Burglary/Theft
  • Money
  • Glass
  • Transit
  • Electronic Equipment
  • Machinery Breakdown
  • General/Mobile Property
  • Tax Audit
  • Employee Dishonesty
  • Workers Compensation
  • Volunteer Personal Accident
  • Public and Products Liability
  • Professional Indemnity
  • Sexual Molestation
  • Officials Liability
  • Employment Practices

Please contact us with any childcare requirements – we cover childcare, daycare, before and after care, aged care, community groups and more.  We insure centres direct, and wholesale to brokers.











First Report of Injury Claim Form – Workers Compensation

Employer’s Report Claim Form – Workers Compensation

Workers Compensation, Injury Mngt Handbook

WorkCover WA Brochure

WorkCover WA 2B Claim Form

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Lets Talk Glass Insurance

Glass Insurance is generally taken as a section within a Commercial Business Pack, as a non-expensive and often required coverage item.  Many leases will specify that a tenant is responsible for Glass Insurance, as well as the landlord and property owner also covering it to ensure there is no lack of coverage.

Lets take a closer look at Glass Insurance?.

What is Glass

(a) Fixed glass forming part of or fixed to the exterior of the building including glass in fixed signs; or

(b) Fixed internal glass including fixed glass in furniture, counters, shelving and showcases, fixed and hanging mirrors,

fixed washbasins, sinks, toilet pans and cisterns, contained within the building.

Glass includes external glass, internal glass and specified glass (if listed as specified).

Insuring Clause

The Insuring Clause of the standard business pack glass section is as follows:

We will insure You for breakage of glass which You own or for which You are legally responsible, occurring during the period of insurance at the premises.

Breakage requires a ‘fracture through its entire thickness’.  It does not include a scratch.

We will pay for the cost of replacement of broken glass with glass of similar manufacture and quality including the reasonable costs for after-hours service by repairers, express delivery and overtime charges to repair or replace broken glass.

We will also pay the extra cost necessarily incurred to comply with the minimum requirements of any statutory authority when replacing the glass.

What’s the Sum Insured ?

There is no sum insured limit or specified limit – the glass is replaced at full replacement cost or ‘replacement value’.

Not a bad throw in by Insurers – considering the premium on Glass can be as low as $200 – with a no limit coverage option.  Large shopfront panels are often $1000’s to fix, so its certainly favourably priced.  Favourable enough to just include it, whenever in doubt!