Terrorism

What Does Terrorism Mean?

Terrorism is the deliberate use of violence or intimidation to achieve a specific outcome, often motivated by political or religious ideology, or by an individual or group’s desire to cause destruction or achieve a goal through violence.

In the context of insurance, assessing the risk of terrorism and setting appropriate premiums is challenging. As a result, most casualty and property insurance policies specifically exclude coverage for terrorism. However, in some cases, endorsements may be available to provide terrorism coverage. Homeowners and renters policies issued by most top-rated homeowners insurance companies contain a similar exclusion, and business owners who want protection usually have to add it as a rider to a commercial property insurance policy.

Insuranceopedia Explains Terrorism

One of the most well-known acts of terrorism was the destruction of the World Trade Center Twin Towers on September 11, 2001. This tragic event resulted in the deaths of thousands of people and caused approximately $30 billion in losses. In this case, hijacked planes were flown into the buildings. While planes were the primary weapon used in this act of terrorism, bombs, and other weapons are more commonly employed in such attacks. A more recent example of terrorism is the Boston Marathon bombing. Both attacks led to a federal backstop called the Terrorism Risk Insurance Act, which is why general liability insurance for U.S. businesses now often includes a terrorism notice spelling out whether the policy picks up these losses.