ABD Offers Tips on Terrorism Insurance Protection for Businesses

February 21, 2003

Heightened terrorism alerts and security warnings by U.S. officials have raised the concerns of business owners and risk managers interested in doing what they can to protect employees and resources.

ABD Insurance and Financial Services, a provider of global risk management and employee benefits solutions, has assembled a checklist that identifies some of the exposures, offers some simple suggestions about how to manage exposure and briefly discusses the Terrorism Risk Insurance Act of 2002.

Primary areas of concern in the event of terrorist activity include:

employee kidnap,
theft of proprietary information and technology,
shipping and receiving of products and
employee injuries.

The full document is available at http://www.cybersure.com/godoc/3137.htm.

The Terrorism and Risk Insurance Act of 2002 requires property and casualty insurers to offer coverage for “certified” terrorist acts that occur on U.S. soil if they are committed by a foreign person or someone with a foreign interest. Some of the key points for business owners and managers are:

*Insurance companies are responsible for providing the option to purchase coverage.
*The coverage applies only to a subset of all terrorist activity.
*If there is a loss that insurance companies have to pay for there will be a surcharge to policyholders after the loss.

“As a country, we have become increasingly aware of the risk of terrorism,” John Schaefer, vice president, Enterprise Risk Management for ABD, commented. “Risk managers are asking what can be done and how their traditional loss control and loss financing tools will respond to this new environment.”

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