What coverages does your company need to face terrorism risks?
Last week’s attacks across the city of Paris not only shocked the world but reminds us that no area is truly safe from a senseless terrorist attack. The coordinated attacks across the city left 100 people dead and 350 others fighting to survive. Not even a week later over 100 were taken hostage at a hotel in Mali, and it was discovered that the Russian airliner crash last month was the aftermath of a bomb. As events such as these continue to escalate, it is becoming more apparent that the risk facing the global insurance industry has been altered and that many business owners don’t understand the risks they may face in the event of a tragedy.
Your business need to evaluate whether TRIPRA is the right protection against an increasing frequency and severity of political violence and terrorism throughout the world. Is TRIPRA enough? What alternative coverage exists and do I want to pay for it? Religious and political violence, Sabotage, Kidnap and Ransom, Civil war, insurrection and chemical biological or radiological contamination are not covered by TRIPRA.
Not only do you want to protect your employees but you also want to protect third parties, physical damage to property, business interruption, and any other extra expenses. While business owners may not comprehend the types of insurance needed, it becomes even more difficult when deciding between political violence coverage and terrorism insurance. It is important to understand the line that is decided by the government that calls what is terrorism and what is political violence. To keep it simple, some examples of political violence are considered wars and civil disturbances, while terrorism involves attacks related to religion or ideology. There are various other distinguishing factors that the government will consider when deciding the classification of attacks.
For most companies, it is best to consider purchasing sections of both. You should discuss the terms of your policy with your broker to know the limits and ensure that property and business interruption are included in your policy. If your business is located in a place of unrest, tier 1 or 2 as described by TRIPRA, you should consider purchasing a stand-alone terrorism policy that will protect your investment, and your employees. Business interruption coverage and a good crisis management plan will help bring stability to the lives of you employees and start the road to recovery after a horrific attacks.
With the increase in attacks this past month, it is crucial for business owners to know their insurance needs. You should review you policies with your broker to ensure that the safety of your assets and employees are being taken care of. Contact a member of Gallagher WGAs Property & Casualty group to review your coverage and make sure you’re properly prepared.
About the Author
David Bardelli is an Area Senior Vice President of Gallagher WGA in the Broker Services Division and leads the firm’s area Casualty Practice. Mr. Bardelli has extensive knowledge with casualty risks, including technology healthcare, business services, and miscellaneous manufacturing groups of all sizes.