Insurance Against Terror?
The Boston Marathon bombing was specifically intended by its perpetrator(s) to inflict maximum suffering and carnage on the innocent people caught in the explosion. Watching the video of the explosion, it is incredible that the death toll was not much, much higher, though the non-fatal injuries the blast inflicted were grave. Clearly less important is the physical damage sustained by the surrounding businesses and buildings next to the blast zone.
It does not appear that there was any significant structural damage to the buildings, but there will be non-trivial damages resulting from the blast and, perhaps even greater, business interruption damages from the forced closure of those locations due to the ongoing investigation of the bombing. This leads us to a relevant question in our wheelhouse: Will these businesses have insurance coverage for these damages?
All things being equal, the broken glass, blast damage, and other physical damage caused by an unintended explosion would be covered by a standard ISO (Insurance Services Office) property policy. Of course, all things are not equal when it comes to terrorism. Terrorism exclusions have become frequent in property policies as well as GL policies. Here is an example of one such terrorism exclusion:
loss or damage caused directly or indirectly by terrorism, including action in hindering or defending against an actual or expected incident of terrorism. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss (from IRMI).
Of course, this requires us to define what we mean by terrorism. Get ready:
"Terrorism" means activities against persons, organizations or property of any nature:1. That involve the following or preparation for the following:
- Use or threat of force or violence;
- Commission or threat of a dangerous act; or
- Commission or threat of an act that interferes with or disrupts an electronic, communication, information, or mechanical system; and2. When one or both of the following applies:
- The effect is to intimidate or coerce a government, or to cause chaos among the civilian population or any segment thereof, or to disrupt any segment of the economy; or
- It is reasonable to believe the intent is to intimidate or coerce a government, or to seek revenge or retaliate, or to further political, ideological, religious, social or economic objectives or to express (or express opposition to) a philosophy or ideology.