Should You Buy Terrorism Insurance?
By: Eric Paulos
Should you buy terrorism insurance or save your money? The answer may depend on how you perceive your building(s) will be affected, at all, in the foreseeable future.
Following the 9-11 attacks on the World Trade Center and Pentagon, damage was estimated at $40 billion dollars. Other than the first attempt to bomb the World Trade Center in 1993, which was limited to the parking garage, and did $300 million damage, 9-11 is the first foreign attack of its kind that has taken place on U.S. soil. Following the 9-11 attacks, the insurance companies were obliged to pay for the damage to property and had no exclusions for terrorism. Similarly to the way that homeowners company previously had no exclusions for earthquake damage prior to the 1971 Sylmar earthquake, after which homeowners’ policies carried earthquake exclusions thereafter, the commercial insurance industry saw the enormous losses they stood to take and moved to draft terrorism exclusions while they worked with the government to find a solution against this new problem.