MANAGING RISKS OF TERRORISM
EPIC TERRORISM PROTECTION
It’s hard to even talk about terrorism, let alone imagine insuring against its possible impact. Discussions about terrorism often refer to horrific actions in far-away places. In today’s world, threats of terrorism have moved closer to home and we need to consider the reality of protecting our property as well as our business interests.
The owners of real estate in major urban areas are particularly exposed to the threat and risks associated with terrorism. Most all are led to believe that the purchase of coverage under the Terrorism Risk Insurance Act (“TRIA”) will definitively protect against damage and the clean up costs associated with terrorist acts. This is not the case.
TRIA is a program in which the federal government shares, with the insurance industry, the risk of loss from future terrorist attacks. Reimbursement is limited to those losses defined as “certified acts of terrorism.” Experts agree that the most likely scenario to impact major urban areas will be an event triggered by a “dirty bomb,” which combines conventional explosives with radioactive materials to contaminate buildings and land.
When TRIA is purchased for both Property and General Liability policies, the absolute pollution exclusions in these programs apply. In this case, no coverage will exist for the remediation of pollution conditions, including damages caused by the release of nuclear, chemical, biological or radioactive materials.
UNDERSTANDING IS THE KEY
At North Shore Risk Management we work to educate our clients to the provisions of the Terrorism Risk Insurance Act and the options to purchase coverages for losses resulting from acts of terrorism. The definition of these kinds of occurrences is very specific, must be certified by the Secretary of the Treasury, in consultation with the Secretary of Homeland Security, and the U.S. Attorney General as an act of terrorism, and reach current trigger levels for aggregate industry insured losses. TRIA has been extended through December 31, 2020.
It is certain that in the absence of this Federal back-stop, insurance carriers will adopt specific exclusions to manage their risk from the uncertainty of costs associated with terrorist acts. Developing a clear understanding of the latest Federal legislation and terrorist tactics whether nuclear, chemical, biological or radioactive is one of the most important responsibilities we take on to ensure that our client’s coverages are inclusive, affordable and current.
WHAT TERRORISM PROTECTION DO YOU NEED?
The “out of sight – out of mind” approach may have worked in the past but the time to find out that insurance will not cover a devastating financial loss is not after an event. Today, a more proactive approach is essential to cover the costs associated with the clean-up of nuclear, chemical, biological and radiological agents and the consequences of an act of terrorism.
At North Shore Risk Management, we have developed and implemented a program to address many of these uncovered exposures. Our collaborative effort to bring together the resources of company underwriters, insurance risk consultants and attorneys specializing in this specific area resulted in a program that provides protection to the owners of real estate property in high target NYC areas. We welcome the opportunity to work with our clients to design and implement these creative solutions.
AT NORTH SHORE RISK MANAGEMENT, WE ARE COMMITTED TO PROTECTING AND PRESERVING YOUR ASSETS. WE HAVE THE KNOWLEDGE AND REQUIRED DISCRETION TO DESIGN RISK MANAGEMENT PROGRAMS TAILORED TO YOUR SPECIFIC NEEDS.
• Business Interruption
and Extra Expense
• Product Liability
• Business Automobile
• Workers’ Compensation
and Employers Liability
• Umbrella/Excess Liability
• Commercial Crime
• Surety Bonding
• Inland and Ocean Marine
• Professional Liability
• Directors and Officers Liability
• Employment Practices Liability
• Property and Business Income
• Cyber Liability
• Personal Property
• Jewelry, Fine Arts and Collectibles
• Automobiles and Watercraft
• Umbrella/Excess Liability