April 16, 2013
When Terrorism Becomes A Reality
For all of us in the insurance industry, we have to be asking ourselves 1) if we are offering terrorism coverage to our insureds; 2) are we going beyond the offer of the Terrorism Risk Insurance Act and offering stand-alone terrorism insurance; and, 3) are we carefully documenting our conversations with our insureds about the terrorism offer?
This week's tragedy at the Boston Marathon has touched each of us on a very personal level and puts fear in our hearts that this could happen again. As the dust settles at the site, there will be many unanswered questions, and some of those issues will concern terrorism and insurance for terrorism.
What do we know at this point?
- It is being speculated that this is an act of terrorism.
- It is uncertain if it is an act of domestic or foreign terrorism.
- It is, also, unlikely at this point that this will be a Certified Act of Terrorism.
What are the immediate insurance issues that we see from this event?
- Severe injuries and death
- Direct damage to buildings and structures
- Direct damage to property (including vehicles)
- Closure of areas due to direct loss and civil authority
- Debris removal and damage
- Workers Compensation
For all of us in the insurance industry, we have to be asking ourselves:
- Are we offering terrorism coverage to our insureds?
- Are we going beyond just the offer of the Terrorism Risk Insurance Act (TRIA) and offer stand-alone terrorism insurance, which is available in the insurance market place?
- Are we carefully documenting our conversations with our insureds about the terrorism offer?
The Insurance Community University has two important classes for you to attend:
- Overview of terrorism risk and exposure
- Review of TRIA (Terrorism Risk Insurance Act)
- Terrorism Insurance
We have heard it a thousand times — “documentation;” but in light of the bombing, we have to take a harder look at what we are doing: your files must speak for themselves and contain the notes on discussions, offers, acceptances, rejections, and follow ups. The Errors & Omissions class is approved with various insurance companies, including Fireman's Fund for credit on your agent's Errors & Omissions renewal insurance.