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Insurance and the Boston Marathon Bombing

May 15, 2013

Boston Marathon bombing 

Doing business in the post-9/11 world can carry a steep price and terrorism insurance is part of that equation.

In “riskier” urban locations like:  airports, stadiums and malls, landlords offer require terrorism insurance and the rate can add up to $1.25 per square foot to the cost of a lease. It’s expensive.

After the Boston marathon bombings, businesses that had terrorism insurance likely qualified for business interruption insurance and insurance companies reimbursed their customers for property damage and lost receipts due to closure and/or if they could show that their receipts were down significantly as a result of the bombing.

Those without terrorism insurance, however, were out of luck.

After the terrorism attack on the World Trade Center on September 11, 2011 insurers started excluding acts of terrorism.  Why? Because the losses were so unpredictable and the claims from a single event could be so huge they could put an insurance company out of business.  Case in point, the claims from 9/11 alone totaled over $32 billion.

As a result, the Terrorism Risk Insurance Act, enacted after 9/11, allows private insurers to limit their losses and makes the federal government a backstop of last resort.

Talk with your insurance agent about the options available to you on your policies.  In Oregon (even Portland) the rates are very, very low and it might make sense to get the coverage.

Filed under: Uncategorized — admin
 
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