Major businesses are now beginning to embrace terrorism insurance more aggressively
Terrorism insurance is becoming more common for businesses. Terrorist attacks are becoming more common, which is beginning to cause worry for businesses that could be caught in such events. Now, six in 10 major businesses now have terrorism insurance coverage. Jeremi Suri, chair of Leadership in Global Affairs, notes that businesses see paying for terrorism insurance as an adequate way to hedge risks. While it is still unlikely for most businesses to experience a terrorist attack, being prepared for such events is becoming a priority.
Texas building owners are very interested in terrorism insurance coverage
According to data from Marsh, a global insurance broker, some 52% of building owners in Texas now have terrorism insurance. Many businesses and building owners see terrorism as a major risk, despite the fact that they may never be involved in any such event. Suri believes that businesses purchasing such insurance protection may be the result of fear rather than risk management. Suri notes that terrorist attacks are still quite rare when compared to other issues that businesses may face.
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Businesses may be driven by fear when it comes to acquiring protection against terrorist attacks
While more businesses are purchasing terrorism insurance, the Federal Terrorism Insurance Program has never been used. The program was established through the Terrorism Risk Insurance Act of 2002, which allows the federal government to provide a backstop for insurance claims related to acts of terrorism. Despite this backstop existing, however, it has proven to be relatively useless, as terrorism is still quite rare in the United States.
Insurance industry is seeing a significant rise in the demand for terrorism insurance coverage
The insurance industry is well attuned to the risks that disasters pose to consumers and businesses alike. Insurers have long had to manage the risks associated with terrorism, but it has only been quite recently that businesses have begun embracing terrorism insurance aggressively. Media coverage of terrorist attacks may have a role to play in this trend, as such events are now covered quite heavily by 24-hour networks.