The Bondi gun attack has been declared a terrorist incident for the purposes of the government-backed reinsurance scheme, while the Insurance Council of Australia says the industry will prioritise support.

Treasurer Jim Chalmers and Financial Services Minister Daniel Mulino say the event declaration ensures businesses can lodge claims related to the shootings on Sunday evening.

“No business affected by this despicable act should have a legitimate claim denied due to terrorism exclusions in their insurance policies,” they said today in a joint statement.

The declaration was made under the Terrorism and Cyclone Insurance Act 2003, based on advice from relevant agencies and following consultation with the Home Affairs Minister.

It activates the terrorism reinsurance pool and overrides any terror exclusions in affected businesses’ policies, allowing them to claim damages in line with their policy terms and conditions.

Relevant claims include commercial property damage, business continuity losses and public liability. Claimants have been asked to contact their insurers in the first instance.

ICA has declared the Bondi attack a significant event, prioritising insurer support for claimants and enabling claims data to be collected and tracked.

“Our thoughts first and foremost are with Australia’s Jewish community in this time of great mourning for the victims of Sunday’s horrendous attack,” CEO Andrew Hall said.  

“The industry is committed to supporting those Bondi businesses impacted through the recovery ahead.”

The Australian Reinsurance Pool Corporation, which oversees the government-backed terrorism scheme, yesterday asked insurers to flag potential claims related to the mass shooting.

The ARPC said today the reduction percentage for the incident had been set at zero, meaning no reduction would apply to eligible insurer liabilities for the the purposes of recoveries.

CEO Christopher Wallace says the declaration ensures that insured businesses will have certainty lodging insurance claims related to the incident.

"The terrorism reinsurance pool exists to safeguard the Australian insurance market from the financial impact of rare but severe terrorism events," he said.

"Today’s declaration ensures insurers can apply the TCI Act provisions and begin assessing eligible claims under the framework of the scheme."

The reinsurance pool was introduced in 2003 after cover became unavailable in the private market following the September 11 2001 attacks in the US.

The Lindt Cafe siege in Sydney in December 2014 is the only previous declared terrorist incident under the scheme. That event resulted in 92 claims totalling $2.3 million from 20 insurers, but amounts were below insurer retentions, with no claims paid from the pool.

The pool is backed by a $10 billion government guarantee, and its funding layers also include a retrocession program providing more than $2 billion in cover. 

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