What type of coverage do you need?

Orlando, Fla. —We all know the world we live in is changing. Challenges and threats are seen virtually everywhere. Nobody wants to talk about this but given the recent events around the world, we considered it was vitally important to have this grown-up dialogue regarding how to protect your business assets. About 60 percent of businesses in the U.S. have terrorism insurance. 



Before the September 11 attacks, business insurers generally neither charged for nor specifically excluded terrorism coverage. The scope of the 9/11 attacks and the resulting $40 billion estimated insured loss changed perceptions dramatically.

The Terrorism Risk Insurance Act (TRIA), which was enacted by Congress in November 2002, ensures that adequate resources are available for businesses to recover and rebuild should they become victims of a terrorist attack. Under TRIA all property/casualty insurers in the U.S. are required to make terrorism coverage available.

While rural and residential areas are less likely to be targeted by a terrorist attack, commercial urban centers, as well as airports and train stations, have a higher risk for terrorist attack thus higher importance to include terrorism insurance in your business coverage. The expense could be considered low since, generally represents 3 to 5 percent of a company’s property insurance costs because it is a public/private risk-sharing partnership that allows the federal government and the insurance industry to share losses in the event of a major terrorist attack.

As with many other cases, a standard business policy alone will not cover losses caused by terrorism. It is offered separately as an “endorsement” or “rider”—to your standard commercial property insurance policy. 

A commercial terrorism policy covers damaged or destroyed property—including buildings, equipment, furnishings and inventory. It may also cover losses associated with the interruption of your business and other liability claims related to the event. It is important to know that losses are only covered by a terrorism insurance policy if the U.S. Department of the Treasury officially certifies an event as an act of terrorism. Property and casualty losses, must total the sum of over $5 million in overall it must cause at least $100 million in damage to be considered a terrorist attack. The definition of a certified act of terrorism has been expanded to cover both domestic and foreign acts of terrorism.

Despite the high incidence in cyber attacks, in general, terrorism insurance is unlikely to cover a cyber-attack, and small businesses need to consider purchasing separate cyber liability insurance.

Also, you must talk to your agent about nuclear, biological, chemical and radiological (NBCR) attacks which are also excluded, except in the life, health and workers compensation lines of insurance.

For us in the insurance industry, these type of claims are the ones we wish to never have to actively process, as we wish a safe world, country, city and town for all. Although, it is our job to asses potential risks, and how to protect and recover your investment.

Let’s all hope for the best but be prepared for the worst. And most importantly: BE VIGILANT, IF YOU SEE SOMETHING SAY SOMETHING!

For personal insurance solutions check out our sister company Orlando Insurance Center
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