Buyers Lack Terrorism Coverage
Seventy-one percent of risk managers are finding it difficult or impossible to obtain adequate terrorism coverage, a survey of commercial insurance buyers has revealed.
Christopher Mandel, president of the New York-based Risk and Insurance Management Society, which surveyed 546 members, told National Underwriter he was taken aback by the “rather startling” number having difficulty with the coverage.
“I was surprised to get the validation at this level in terms of so many saying they have been affected negatively,” he said. “Even though I know a lot of people are being pressed by their lenders for the properties they own and mortgage to present evidence of terrorism coverage, I didn't think that as many lenders were doing it as apparently are.”
Coverage is available, he said, “but typically not to the satisfaction of many lenders in the sense of the amount of money they have at risk.”
The survey found that 84 percent do not feel confident their companies would be sufficiently covered in the event of another attack. Sixty-five percent have no terrorism coverage at all.
Mr. Mandel said it is imperative that federal legislators “understand that this remains a critical issue for American business and for our economy.” RIMS supports the establishment of a federal reinsurance backstop for terrorism losses. The U.S. House and Senate is trying to reconcile two very different versions of that concept (see page 5).
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 16, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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