How Insurers Are Responding to the Rising Threat of Chemical and Biological Terror Attacks

A new report by the Geneva Association and IFTRIP warns that the insurance industry must urgently prepare for terrorist attacks involving chemical, biological, radiological, or nuclear (CBRN) materials. While these events remain rare, they pose a catastrophic risk profile that most traditional insurance products are not designed to cover. Recent geopolitical tensions and the spread of dual-use technologies—such as drones, synthetic biology, and AI—are lowering the barriers for violent non-state actors to develop and deploy dangerous materials.

The insurance industry has generally excluded or severely limited coverage for these types of attacks. Most property and casualty (P&C) policies contain strict exclusions for radiation, contamination, or chemical warfare, and few reinsurers are willing to absorb the tail risk. Public-private terrorism insurance pools exist in some countries, but there is no international standard or cohesive strategy for covering these high-severity risks.

The report also highlights deteriorating nuclear security safeguards and weak regulatory oversight of radioactive materials, increasing the likelihood of radiological attacks or accidental releases. Even when casualties are low, chemical or biological attacks can cause long-term environmental damage, economic paralysis, and lasting psychological trauma. Modeling scenarios show wide-reaching impacts—especially to supply chains, tourism, and government budgets.

To narrow the widening protection gap, the report urges insurers and governments to strengthen risk modeling, develop better public-private schemes, and expand international cooperation. Without coordinated action, the financial system could struggle to absorb the fallout of a large-scale terror event involving hazardous agents.