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Terrorism Insurance that Covers Domestic Attacks, Too

October 26, 2017

It’s been more than 16 years now and there’s no doubt the world has changed a lot since 9/11. Getting onto a plane is a lot tougher than it used to be. Government surveillance and privacy concerns are more pronounced than ever. It’s no wonder two-thirds of U.S. businesses today are covered by terrorism insurance. By comparison, in 2003, two years after the Sept. 11 attacks, less than a third of businesses had terrorism coverage.

terrorism insurance
CCIG’s Scott Carlson.

Yet terrorism-related losses still are covered only if the government certifies an attack as an act of terrorism. Property and casualty losses also must exceed $5 million before any attack can be certified as an act of terrorism.

Neither has happened since the federal law that created the government’s terrorism insurance fund was enacted in 2002.

That leaves employers at risk, unfortunately, which explains why a growing number of companies, especially those in larger cities such as Denver, are opting for standalone terrorism insurance. A standalone policy, most critically, doesn’t require a government-certified act of terrorism for coverage to be triggered.

These policies help businesses deal with:

  • active shooter situations;
  • the extra expense for evacuating people due to a threat;
  • the interruption of their operations;
  • canceled reservations at events;
  • threats and hoaxes that disrupt business.

Thanks to U.S. counter-terrorism efforts, the threat from attack on our shores by ISIS or Al-Qaeda or some other foreign group isn’t as high today as it was 16 years ago. The problem is, some federal and local law enforcement groups view the domestic terror threat as equal to – and in some cases greater than – the threat from foreign terror groups.

As the horrific Oct. 1 shootings at the concert in Las Vegas illustrated all too well, live events and public venues can be vulnerable targets.

Fortunately, today’s terrorism policies provide protection beyond the coverage provided by the U.S. government’s Terrorism Risk Insurance Program Reauthorization Act, or TRIPRA.

The policies now on the market include business interruption coverage even if no physical property damage is involved. They’ll also kick in if the loss was caused by a threat alone.

Moreover, there’s no minimum loss required, beyond the deductible, for coverage to start.

We’re not saying this coverage is appropriate for everyone. There are two important factors to consider when deciding whether to insure yourself against terrorism:

  • Business location. Commercial urban centers, as well as airports and train stations, have a higher risk for terrorist attack.
  • Type of business. Certain companies — such as those in the energy sector or hospitality — have a higher risk of being targeted in terrorist attacks vs. a retailer, for example.

But all kinds of businesses can suffer significant losses following acts of terrorism or political violence, even if they were not directly targeted. For example, in their response to an attack, the authorities might shut down affected areas for significant periods of time. That would result in a direct loss of revenue to a business.

That’s why “denial of access” coverage is now available, covering losses sustained when access to and from a business are barred because of a lockdown. There’s also coverage available for damage caused by the civil authorities.

In addition, coverage is available for losses suffered in the form of delays in delivery or receipt of goods from suppliers.

Beyond covering financial losses, these policies also offer clients crisis management assistance services on a 24/7 basis.

Some things are just impossible to insure, such as war or a nuclear explosion. But it’s good to know that insurers are responding to the rising threat of terror attacks in ways that should help business owners breathe a bit easier.

Scott Carlson is a Vice President at CCIG. Reach him at or 720-330-7925.

Also read
: A New Approach to Active Shooters

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