Due to the 2010 decision by the Bundesgerichtshof, the costs for cover of endangered buildings and nearby estates can now generally be divided up proportionately and then charged to tenants. For Mr Harbrücker, this decision finally offered some legal clarity to the situation but some confusion remains. “We have no detailed information about the definition of an endangered building and when an estate is close to one,” he said.

Since 2008, Cologne-based Extremus has been using a special scale for the calculation of premiums, depending on the risk. Critical data includes the size and the location of the building as well as its use and whether the object has any particular symbolic meaning. “Using these criteria, property managers should check their risks and any current insurance cover,” Mr Zagel said. The decision by the Federal Court of Justice should encourage owners to think about their terror cover, he said.

In Germany, Extremus carries risks up to €10bn. Of this, insurers cover the first €2bn. The government provides a guarantee for the remaining €8bn, for which it charges a fee. In June the federal government renewed its guarantee until 2013.

On 3 September, Extremus celebrated its 9th anniversary and is now well-established in the market. Clients’ demand still depends on the industry, Mr Harbrücker reports. “Our main focus is on the real estate industry, but we have also recorded some growth in medium-sized companies, especially suppliers.”

Extremus covers losses from €25m upwards. Losses below that sum are covered by standard fire insurance. The company currently insures about 1,300 clients, including property funds, banks, insurance companies, large firms and almost every German airport. Premium income in 2011 stands at around €54.3m.

Up until now Extremus has not had to cope with any losses this year. But clients have not asked for lower premiums. The insurer only deals with losses that occur in Germany, but it has been cooperating with Bermuda-based Lloyd’s insurer Catlin since 2006. This enables it to offer clients abroad coverage under Extremus conditions. In 2010, the company underwrote 81 such policies with an insured sum of €25.6bn and premium income of €3.1m. The greatest demand came from Luxembourg, Poland, the Czech Republic, Belgium and Italy.

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