As recent world events highlight, terrorism risk appears to be changing. Small groups and "lone wolf" terrorists are now a growing concern.
Companies and insurance clients may be questioning whether they are adequately insured for business interruption and other property losses.
|Terrorism risk insurance
Prior to Sept. 11, 2001, when the World Trade Center and the Pentagon were attacked by terrorists, insurers provided terrorism coverage to their commercial insurance customers essentially free of charge because the chance of property damage from terrorist acts was considered remote, according to the Insurance Information Institute. After September 11, insurers began to reassess the risk.
Concerned about the limited availability of terrorism coverage in high-risk areas and its impact on the economy, Congress passed the Terrorism Risk Insurance Act. The act provides a temporary program that, in the event of major terrorist attack, allows the insurance industry and federal government to share losses according to a specific formula.
The Terrorism Risk Insurance Act was signed into law on Nov. 26, 2002, and renewed again for six years in January 2015. The new law is known as the Terrorism Risk Insurance Program Reauthorization Act of 2015.
|Major property losses
Unfortunately, terrorism has been around for decades. Remember when IRA car bombs and hijacked airplanes where always in the news?
Here are the 20 most costly terrorist acts by insured property losses:
In this March 17, 1992, file photo, firemen and rescue workers walk through the debris of Israel's Embassy after a terrorist attack in Buenos Aires, Argentina. The bombing in Buenos Aires was widely blamed on Tehran. (Photo: Don Rypka/AP Photo)
|20. Bomb attack on Israel's embassy in Buenos Aires.
March 17, 1992
Buenos Aires, Argentina
Insured property losses: $51 million.
Fatalities: 24.
(Photo: iStock)
|19. Hijacked Ethiopian Airlines Boeing 767-260 ditched at sea.
Nov. 23, 1996
Indian Ocean
Insured property losses: $60 million.
Fatalities: 127.
The wreckage of a double-decker bus with its top blown off and damaged cars scattered on the road at Tavistock Square in central London in this July 7, 2005, file photo. (Photo: Sang Tan/AP Photo)
|18. Four bombs explode during rush hour in a tube and bus.
July 7, 2005
London
Insured property losses: $63 million.
Fatalities: 52.
Merchants return to their burned out businesses in the Pettha area of downtown Colombo, Sri Lanka on Aug. 1, 1983, to see what can be salvaged following a week of rioting. More than 1,000 businesses and homes of Tamil's were destroyed in the racial riots. (Photo: JLR/AP Photo)
|17. Riot.
July 25, 1983
Sri Lanka
Insured property losses: $63 million.
Fatalities: 0.
In this December 1988 file photo, a police officer walks past the damage in Lockerbie, Scotland, caused by Pan Am Flight 103 from London to New York. The Dec. 21, 1988, explosion would quickly transform the Scottish town into a byword for international terror. (AP Photo)
|16. Bomb explodes on board of a Pan Am Boeing 747.
Dec. 21, 1988
Lockerbie, Scotland
Insured property losses: $76 million.
Fatalities: 270.
The wreckage of the Barajas International Airport car park in Madrid, Jan. 2, 2007. Rescue workers keep searching for two people missing in the rubble of a thunderous car bomb blast blamed on the Basque separatist group ETA that shattered a nine-month-old cease-fire the group had described as permanent, officials said. (Photo: Daniel Ochoa de Olza/AP Photo)
|15. Bomb exploded in car garage at Barajas Airport.
Dec. 30, 2006
Madrid, Spain
Insured property losses: $78 million.
Fatalities: 2.
(AP-Photo/Fotopres)
|14. Bomb attack on a newly built, still unoccupied prison.
March 27, 1993
Weiterstadt, Germany
Insured property losses: $95 million.
Fatalities: 0.
In this Nov. 29, 2008, file photo, an Indian soldier takes cover as the Taj Mahal hotel burns during gun battle between Indian military and militants inside the hotel in Mumbai, India. (Photo: David Guttenfelder/AP Photo)
|13. Attack on two hotels; Jewish center.
Nov. 26, 2008
Mumbai, India
Insured property losses: $113 million.
Fatalities: 172.
London's financial district. (Photo: iStock)
|12. Bomb explodes in financial district.
April 11, 1992
London
Insured property losses: $128 million.
Fatalities: 0.
The tail of the hijacked Pan American 747 jumbo jet is the only part left after the huge plane was blown up by Palestinian commandos, Sept. 7, 1970. The jet was one of three hijacked over Europe to the Middle East that day. (AP Photo)
|11. Hijacked PanAm B-747 dynamited on ground.
Sept. 6, 1970
Cairo, Egypt
Insured property losses: $148 million.
Fatalities: 0.
Smoke billows from hijacked BOAC VC-10 and Swissair jetliners Saturday, Sept. 12, 1970, after guerrillas set off blasts at desert airstrip at Al Khana, Jordan. The TWA Boeing 707 is completely concealed by smoke from fires the explosion set. (AP Photo)
|10. Hijacked Swissair DC-8, TWA Boeing 707, BOAC VC-10 dynamited on ground.
Sept. 12, 1970
Dawson's Field (unused RAF airstrip in desert), Zerqa, Jordan
Insured property losses: $170 million.
Fatalities: 0.
Thousands of search and rescue crews attend a memorial service in front of the Alfred P. Murrah Federal Building in Oklahoma City on Friday, May 5, 1995. (Photo: Bill Waugh/AP Photo)
|9. Truck bomb exploded in front of government building.
April 19, 1995
Oklahoma City, Oklahoma
Insured property losses: $195 million.
Fatalities: 168.
Recovery operations were in progress at the Haulbowling naval base near Cork, Ireland, June 23, 1985, following the Air India Boeing 747 crash off the Irish coast which killed all 329 people on board. Irish sailors, accompanied by a nurse, carry one of the bodies recovered from the sea. (Photo: John Redman/AP Photo)
|8. Bomb explodes on board of an Air India Boeing 747.
June 23, 1985
Irish Sea, North Atlantic
Insured property losses: $217 million.
Fatalities: 329.
This Saturday, Feb. 10, 1996, file photo shows the destruction of a bomb blast at South Quay in London's Docklands area in which 30 people were injured. The bomb exploded near Britain's tallest high-rise, Canary Wharf Tower, just an hour after the IRA announced it was aborting a one and a half year-old cease-fire. (Photo: Alastair Grant/AP Photo)
|7. Irish Republican Army (IRA) bomb explodes in South Key Docklands.
Feb. 9, 1996
London
Insured property losses: $347 million.
Fatalities: 2.
(Photo: iStock)
|6. Rebels destroy 3 airliners, 8 military aircraft and heavily damage 3 civilian aircraft.
July 24, 2001
Colombo, Sri Lanka
Insured property losses: $533 million.
Fatalities: 20.
A gaping hole caused by an explosion in an underground garage at New York City's World Trade Center reveals various levels of parking beneath the twin towers complex, March 8, 1993. (Photo: Richard Drew/AP Photo)
|5. Bomb explodes in garage of World Trade Center.
Feb. 26, 1993
New York City
Insured property losses: $837 million.
Fatalities: 6.
(Photo: iStock)
|4. Bomb explodes in financial district.
April 10, 1992
London
Insured property losses: $899 million.
Fatalities: 3.
(Photo: iStock)
|3. IRA car bomb explodes near shopping mall.
June 15, 1996
Manchester, England
Insured property losses: $996 million.
Fatalities: 3.
(Photo: iStock)
|2. Bomb explodes near NatWest tower in the financial district.
April 24, 1993
London
Insured property losses: $1.22 billion.
Fatalities: 1.
Cars are buried under debris in the aftermath of the Sept. 11, 2001, attacks. (Photo: Shawn Baldwin/AP Photo)
|1. Hijacked airliners crash into World Trade Center and Pentagon.
Sept. 11, 2001
New York City; Washington, D.C.; Pennsylvania
Insured property losses: $25.15 billion.
Fatalities: 2,982.
(Source of data: Swiss Re. Includes bodily injury and aviation hull losses. Updated to 2015 dollars by the Insurance Information Institute using the U.S. Bureau of Labor Statistics CPI Inflation Calculator.)
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Jayleen R. Heft
Jayleen Heft is the digital content editor for PropertyCasualty360.com. Contact her at [email protected].
