Is Terrorism Insurance Really Necessary for Large Companies?
Posted April 01, 2022 in Terrorism Insurance
2 Minute Read:
As a business owner, you know that your business faces many threats, terrorism being one of those you cannot afford to ignore.
Whether your business is based in the United States or abroad, the risk of suffering heavy losses as a result of a terror attack is an issue you need to be concerned about.
Therefore, for you to protect your investment, you need to consider having terrorism insurance. This is an insurance policy that is designed to protect businesses against financial losses and liabilities that might occur as a result of terrorism activities.
If you are looking for a dependable insurance company providing coverage against the risk of terrorism, Gallant Risk & Insurance Services, LLC, is the answer. Feel free to contact us today for more information about our company and services.
What Does Terrorism Insurance Cover?
In the past, terrorism-related risks were not excluded from general business or property insurance policies.
However, after the unfortunate events of September 11, 2001, many insurance companies started to exclude terror risks from their insurance contracts. These days, terrorism insurance is offered separately.
In some cases, you can also get coverage against terrorism as a special addition to the standard commercial property insurance. Terrorism insurance usually covers destroyed or damaged property, including buildings, inventory, furnishings, and equipment. The policy might also cover a business against losses that might occur as a result of business interruption caused by a terror attack. Last but not least, terrorism insurance might also protect you against financial losses that might occur as a result of liability claims against your business following an act of terrorism.
However, it is worth noting that losses will only be covered by a terrorism insurance policy only if an event has been certified as an act of terrorism by the U.S. Department of the Treasury.
For this to happen, the act must be violent and must involve an individual or a group trying to coerce the US government or civilians. For an act to be certified as an act of terrorism, losses must exceed $5 million.
Does Your Business Need Terrorism Insurance?
A lot of business owners do not take the risk of terrorism with the seriousness it deserves.
However, the truth is that terrorism is extremely unpredictable, and it can affect anyone at any time. But as to whether your business needs terrorism insurance depends on its nature. For instance, if you run a small local business that relies on local trade, terrorism insurance might not be a priority. However, if you run a large international company that relies heavily on international trade, then terrorism insurance is a necessity.
The Bottom Line
The importance of terrorism insurance cannot be overstated, especially for international companies and locally operated companies that rely heavily on international trade.