Does Commercial Insurance Cover Terrorist Damages and Losses?

With news sources highlighting the very frightening world-reality that terrorism can strike anywhere and result in losses and damages that include injury and death, what is there to do?

According to National Counter-terrorism government posts, the best manner to keep safe is by developing a mindset about questionable activities. Did you see something in your vicinity that does look right?

Then, notify the officials promptly at the twenty-four hour, seven days a week hotline.

What to report when calling the hotline:

• What you saw
• Who you saw doing it
• Where you saw it
• When you saw it
• Why you think the activity you saw can be classified as suspicious

Being proactive certainly is one step in protecting your business, your home and your family. But in the event of the unthinkable – a terror attack in your vicinity – would your current plan adequately protect your business premises, contents, and vehicles used for operation?

The Overall Insurance Outlook

Prior to the September 11th, 2001 terror attacks, American residents viewed themselves as in a safety net, with terror activity placed at the lower rungs of likelihood. During that era, insurance companies presented property and casualty “all perils” coverage that encompassed catastrophic losses caused by terror acts. After the Twin Towers attacks, however, the industry panicked and terror acts were specifically excluded from many commercial insurance plans all over the country. If a business wanted terror protection, it henceforth needed to contact their agency to attach a separate terrorism rider to the policy.

What a commercial terror rider covers property damage or business losses, including:

• Damaged/destroyed vehicles (car, truck, motorcycle, boat)
• Workers compensation for injury
• Benefits for employees that lost their lives

What limitations does terrorism insurance have? Terrorism coverage does not include nuclear and biological assaults; it also does not include acts of warfare.

How do the insurance carriers determine if someone has been a victim of terrorism? As of November 2002, the United States Congress passed the Terrorism Risk Insurance Act. The act places responsibility for determining if an event can be placed under the category of terrorism on the United States Treasury Department. Accordingly, the act must be performed by “an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion.” Besides this, in order for a terrorist act to be covered, insured damages should total a minimum of five million dollars.

A qualified independent insurance agency will be able to educate customers more about terrorism and related policies.