A Look at Terrorism Insurance

Terrorism insurance is a term used to refer to any type of policy where the insurer offers a guarantee to pay a specified amount of money if the life or property of the insured has been lost or destroyed. This insurance can also cover business delays or otherwise altered business results due to acts of terrorism. Many insurance companies were hesitant about covering damages brought about by terrorist acts, so many governments have agreed to help insurance providers make payments in times of big terror attacks.

In the US, the 2007 Terrorism Risk Insurance Reauthorization Act (TRIP) has been put in place to prevent bankruptcy or insolvency of insurance companies in case their clients seek damage payments due to terrorist attacks. Such partnership with the government encourages many insurers to provide various insurance products that include terrorism coverage. Other countries, including Iraq, also offer different terrorism insurance protection.

Under the TRIP act, insurance companies that are licensed to operate in the US must include acts of terrorism as part of their covered risks in all commercial casualty and property insurance policies. Insurers can also offer terrorist attack coverage for travelers or as part of disability medical and workers compensation insurance plans.

What to Expect

Today, companies and individuals alike can secure protection through terrorism insurance coverage. People who travel a lot, especially to areas that are known to be terrorism hotspots, can take advantage of terrorism travel insurance. This policy offers airline ticket refunds if trips are canceled due to acts of terrorism. Typically, all terrorism coverage plans will provide compensation if the insured suffers in a terror attack. Certain types of insurance that cover terrorism provide indemnities in case an individual has been kidnapped or is in need of ransom. There are also medical or life insurance policies that offer compensation in case of terror attacks.

Stand Alone Terrorism Insurance Policy

Stand alone policies can be customized to provide protection against losses that are limited or not covered by the TRIP act. Often, these policies can be taken for coverage in places that are outside the country. The cost of getting this policy, which commonly has terms of up to 36 months, is higher than regular all-risk insurance policies.

All-Risk Terrorism Insurance Policy

All-risk policies, which include casualty and property insurance, must cover all acts of terrorism, whether certified or non-certified by authorities. Just like in other types of casualty or property insurance policies, the cost of all-risk policies that include terrorism coverage is dependent on deductibles, per-occurrence limits and location.

Terrorism Insurance Policy

This policy is usually required for people who are traveling to a different country. The coverage of a terrorism travel insurance is not much different from the regular travel insurance, except for the added coverage that offer insured individuals with free hospitalization and medical services, ticket refunds, allowances in case trips to the destination has been canceled and other related benefits if the insured becomes a victim of an act of terrorism while traveling.