The government has broadened the insurance cover offered for terrorist attacks on offices to include strikes by nuclear and biological weapons.
The decision to widen the scope of cover offered by Pool Re, the government-backed reinsurer set up in 1993, should ease fears that developers will struggle to obtain insurance for projects in the wake of the attacks of 11 September.

Pool Re used to cover damage from "fire and explosion" but this has been extended to "all risks". The government says this will include biological contamination, nuclear attacks, the use of aircraft in attacks and flood damage.

Ruth Kelly, financial secretary to the Treasury, said: "These changes will provide more certainty for the insurance industry and its customers and put Pool Re on a more modern footing."

Pool Re is a reinsurance firm owned by most of the UK's commercial insurers. The Treasury acts as Pool Re's last-resort reinsurer should the fund ever be exhausted by a series of large claims.

Under the new rules, the maximum amount individual insurers can be liable for will be capped at £30m per terrorist attack.