Is Your Business Pr

epared for Terroris

m?

By Floyd Arthur

Is Your Business
Prepared for Terrorism?

On December 2, 2015, two

heavily armed perpetrators
opened fire at a Christmas

party for employees of the

San Bernardino County
Health Department in San

Bernardino, California, killing

14 people and wounding 26.
The attack reignited fears

of global terrorism here in the

United States, and brought
the city of San Bernardino

to a standstill as law
enforcement officials scrambled
to find the people and the

motives behind the

attacks.

Terrorism
Insurance

The attacks also crippled the

San Bernardino County Health
Department, which faced

the nearly impossible task of

maintaining normal operations
with almost 40 fewer

employees than it
had on hand before.

To assist the beleaguered

health department, Gov. Jerry
Brown of California declared

a state of emergency in San

Bernardino County on
December 18. The declaration

allowed the state to send in

replacement employees until
the injured staffers return

to work and empowered the

state Office of Emergency
Services to provide additional

assistance to the the county

and the citizens who were
impacted by the event.

How Terrorism Can

Impact Your Business

The tragedy in San Bernardino

demonstrates all too well how a
single act of terrorism

can bring a business to its

knees. Although terrorist
attacks are, fortunately, rare in

the United States, those that

have occurred have had
devastating consequences -- not

just in terms of lives lost

and people injured, but in
the amount of damage to

surrounding property. Following

the Boston Marathon bombing in
2013, for example,

Massachusetts largest insurers

paid out over $1.9 million in
property damage claims.

The cost of the World Trade

Center attacks in New York
was $31.6 billion in property

damage alone.

Further, a terrorist attack can

interrupt normal business
operations for many days or

weeks as law enforcement

and federal investigators sift
through the site for clues. If,

as in San Bernardino, a large

number of employees or key
personnel are injured in

the attack ,even lengthier

interruptions can ensue.

How Terrorism
Insurance May Help

In the wake of the September

11, 2001, terrorist attacks in
New York, Pennsylvania

and Washington D.C., Congress

passed the Terrorism Risk
Insurance Act, which

created a federally-backed
insurance program to assist
businesses who sustained

property damage due to

terrorism. The program, which
was reauthorized by the

Obama administration in 2015,

establishes a dollar threshold
above which the federal

government shares a portion

of the cost of payments made
by insurers to businesses

that suffer damages in a

terrorist attack. The law also
mandates that all commercial

insurers offer the coverage to

all businesses and certain
other types of commercial

enterprises they
insure.

The TIRA, however, has some

significant limitations. For
example, an attack must be

certified as an act of terrorism

by the Secretary of the Treasury
and the Secretary of

Homeland Security before

the federal government steps
in. According to the language

of the original law, this means

that an attack, whether
perpetrated by foreign or

domestic agents,
must be deemed:

an act that is dangerous

to human life, property, or
infrastructure and to have

resulted in damage within

the U.S. (or outside the U.S.
in the case of a U.S.-flagged

vessel, aircraft or premises

of a U.S. mission). It must
be committed as part of an

effort to coerce U.S. civilians

or to influence either policy
or conduct of the U.S.

Government
through coercion.

Further, as of 2015, the

aggregate amount of property
damage claims suffered by the

insurance industry due to

an attack must be at least
$100 million before the

government will certify an

attack as a terrorist act. That
amount increases by $20

million per calendar year to

a maximum of $200 million
in the year 2020.

Do You Need
Terrorism
Insurance?

The limitations of the federally

backed terrorism insurance
program apply primarily

to insurers: They determine

who bears the cost -- the
insurer or the federal

government -- when an act of

terrorism causes property
damage to a business or

results in bodily injury to its

employees. Furthermore,
damages due to acts of

terrorism are specifically

excluded from many property
and casualty policies, so a

business without this coverage

could find itself in dire financial
circumstances in the

event of a terrorist
attack.

If you are interested in learning

more about the benefits of
terrorism insurance, talk

with one of our commercial

insurance experts today.
We will help you design an

insurance program that

addresses all of your risk in
the most comprehensive and

cost-effective way. Just call

us at 516-292-3780 between
9 a.m. and 6 p.m. to schedule

an appointment, or
request a free consultation
online now.

Visit
www.CarmooGroup
.com