Coverage for Terrorism, Riot and Active Assailant Threats

It’s hard to imagine a violent attack on your organization – but that doesn’t mean you shouldn’t prepare for the possibility. Both active shooter incidents and riot-related losses have increased over the past two decades. As with any other type of crisis, a comprehensive plan can help businesses survive an incident, and that plan should include appropriate insurance coverage.

A Surge in Civil Unrest

Civil unrest has doubled during the last decade, according to the 2020 Global Peace Index. Both violent and nonviolent demonstrations have increased.

France 24 reports that anti-lockdown protests have occurred in many European countries. According to Yahoo News, Steve Reed, MP for Croydon North, has said that the risk of unrest in the UK is “higher than ever.”

Civil unrest has also surged in the United States. Axios says that the 2020 riots sparked by George Floyd’s death caused $1 billion to $2 billion in insured losses. This amount eclipses the previous record for riot-related losses, set by the 1992 Los Angeles riots.

Shootings and Vehicle-Borne Attacks

Shootings are another problem in the United States. According to the FBI, 277 active shootings occurred between 2000 and 2018. Nearly half of these took place in commercial businesses, while 20.6% took place in educational settings, 4.3% took place in health care facilities, and 4.0% took place in houses of worship. The number of incidents has been increasing. In 2000, only one incident occurred. In 2020, there were 40 active shooter incidents and the numbers are rising.

In Europe, terrorist attacks using vehicles have increased. According to the European Commission, ramming attacks have killed at least 130 people since 2014.

Changes in Risks and Coverage

Following a riot, businesses may look to their property insurance policy for coverage. However, after the recent riots and record-breaking losses, some carriers have pushed for heavy premium increases for Strike, Riots, and Civil Commotions (SRCC) coverage.

As a result, businessowners may see their insurance rates increase. Carving out these perils to the specialized political violence markets can give businesses a more economical solution and the peace of mind of having a specific, primary coverage. Active Assailant Liability coverage can offer a form of deductible buy-back for General Liability policies with increased excesses.

Insurance products have also evolved to effectively respond to active shooter incidents, vehicle-borne attacks, and other incidents. These coverages focus on death and injury to personnel and subsequent crisis management, in addition to property damage and business interruption.

Terrorism Coverage Beyond TRIA

When people think of coverage for terrorism, TRIA might come to mind.

TRIA, or the Terrorism Risk Insurance Act, was a temporary federal program established to help insurers deal with terrorism losses. According to the National Association of Insurance Commissioners, TRIA was originally created as a three-year program in the aftermath of the attacks on the World Trade Center and the Pentagon. TRIA has been renewed four times and is currently set to expire in 2027.

However, TRIA may not meet all modern coverage needs. Although TRIA provides coverage for terrorism incidents that occur in the U.S., are declared by the government and have a minimum loss value of at least $5 million, this narrow definition of coverage can exclude many losses. In fact, due to its strict definitions, and industry-wide retention requirement, TRIA hasn’t paid out since 9/11 according to the Insurance Journal.

Superior coverage options are available. Lloyd’s of London offers coverage for both terrorism and sabotage, and coverage is also available for nine additional loss events. It is worldwide multijurisdictional, the trigger can be any event per policy wording definitions, whether or not it is a government-declared terrorism event, and there’s no minimum criteria for the loss value.

Protecting Your Business

A terrorism, riot or active assailant threat can be devastating. In addition to the possibility of injury and death, organizations can also face substantial property damage, as well as losses stemming from event cancellation. Even just the threat of an attack or a hoax can cause significant losses for your business.

The right insurance can shield your business from these losses. Costero’s solutions include, but are not limited to:

• Sabotage, terrorism, riots, strikes, civil commotion, malicious damage, looting, rebellion, insurrection, coup d’etat, mutiny, counter insurgency, civil war, and war. (Cover can be structured to include all, or only a selection of these perils.)
• Active assailant, including crisis management, death & injury benefits, public relations costs, relocation, counselling, medical expenses, and additional security.
• Business Interruption, including loss of revenue, loss of attraction, contingent business interruption, utilities, denial of access, threats and/or hoaxes and any declared extra expense.
• Liability, including third party and employers’ liability coverage, following insured perils.
• Parametric terrorism and cyber terrorism.

Take Steps Now

Comprehensive insurance can help your company deal with the aftermath of terrorism, riot or active assailant incident. To get your team through the event, however, you need to implement training and policies designed to protect your workers and your business.

• Do your workers know what to do if there is an active shooter? The FBI provides active shooter resources and training videos that demonstrate the “Run. Hide. Fight.” strategy.
• Does your business have a plan to deal with riots? The S. Chamber of Commerce Foundation has tips on how to protect your business from civil unrest.
• Do you know how to stay safe during a terrorist attack? Read the advice from the Metropolitan Police on how to stay safe.

Need Guidance?

Learn more about political violence and terrorism solutions and contact us to speak to an expert.