It’s a subject that no one wants to think of, and yet, if you own a commercial property, you ought to think about whether it’s insured against acts of terrorism. The 9/11 terrorist attacks resulted in almost 3,000 deaths and approximately $44 billion in insured losses in today’s dollars. While we all pray that such an attack will never again take place, commercial property owners must make certain that they are adequately protected in the event that the unthinkable should occur.
Terrorism Risk Insurance Act and What It Means for You
In 2002, Congress enacted the Terrorism Risk Insurance Act (TRIA) to serve as a temporary measure to provide for supplying catastrophic federal reinsurance for terrorism risks. Ultimately, the federal program offered encouragement to insurers to continue providing coverage for sports stadiums, office buildings, and other potential targets. Recently, concern was raised as TRIA was set to expire at the end of last year. While the program had earned bipartisan congressional support, political gridlock brought the renewal of the program to a grinding halt. Eventually, an agreement was reached and the bill was signed into law, renewing the program for another six years and providing a backstop for owners of sports stadiums, skyscrapers, malls, and other projects that could be potential targets. Discussion regarding renewal of the program had reached a near fever pitch in light of the approaching Super Bowl.
Even if it seems as though your business is far removed from a potential terrorism threat, experts point out that the risk is still very much real. Approximately 60 percent of businesses today have terrorism insurance. Such a policy can cover vehicles that are destroyed or damaged and pay benefits for workers who are injured or killed during a terrorist attack.
This type of insurance is designed to specifically cover business losses or property damage associated with acts of terrorism. It should be noted that the Treasury Department has the responsibility of certifying in an official capacity whether an event is classified as an act of terror or not for the purposes of insurance coverage.
Determining Your Risk
While insurance companies often provided terrorism coverage for little to no charge prior to 9/11, that has since changed. If you are considering purchasing terrorism coverage, you should be aware that insurance providers will typically assess your risk of terror in determining your rates. Your risk factors are largely determined based on location. For instance, if you operate a business in a major urban area, then you might be considered a higher potential attack target, thus triggering higher rates than if you operate a business in a smaller, more rural area that isn’t considered as vulnerable.
The risk of a terror attack is something that no one wants to dwell upon. Yet, it’s a troubling reality that must be faced. If you want to make certain your business is protected, Evergreen Insurance offers a variety of different insurance options. To learn more about our insurance products, contact one of our representatives today.