Business Insurance Coverage: Terrorism Insurance

On Tuesday, October 31, a man plowed a pickup truck into a crowded bike path in lower Manhattan. Eight people were killed and 11 more injured. A note found near the truck indicate the driver’s affiliation with the Islamic State, but no evidence of a wider plot or direct ties between the driver and ISIS has been found, and the incident is another in a growing list of “inspired” attacks, according to counterterrorism experts.

Although New York City mayor Bill de Blasio and other politicians have called the attack an act of terror, policyholders with terrorism insurance are only covered by that policy if the U.S. Department of the Treasury officially certifies an event as an act of terrorism. This requires that the act be violent and driven by the desire of an individual or individuals to coerce U.S. civilians or government. The act must also cause over $5 million in property and casualty losses.

Since the attacks on September 11, none of the attacks on the U.S., including the Boston Marathon bombing, have been certified as terrorist acts by the Treasury. In the absence of that certification, business owners can file claims under their standard property casualty policies.

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