Terrorism and Insurance

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Terrorism consequences Terrorism damage The consequences of terrorism are most strongly felt at a personal level, and this is exactly what terrorist want, the point of a terrorist act being the instilling of terror in the members of a group or society at large. Besides the lingering effect in people's minds, there are also the immediate damage caused to property and the broader effect on the economic well-being of companies, industries, and the nation. Injury or death Of course, the saddest consequence of a terrorist act is injury or death to people. Everyone at a terrorism event site--whether they are employees, customers, tenants, by-standers--are at risk. One concern for insurance companies is that there are more claims of mental disability as a result of terrorist events. Walter Penk, a Boston-area psychologist who has studied Post Traumatic Stress Disorder for decades for the Veterans Administration, believes that human-caused threats to one's sense of safety seem to cause relatively more cases of Post Traumatic Stress Disorder. Twenty percent of those "in harm's way" and 5% of bystanders would be expected to acquire Post Traumatic Stress Disorder to the point of suffering some functional compromise (Post Traumatic Stress Disorder in Today's Workplace by Peter Rousmaniere and Jennifer Christian, MD). Damage to buildings and personal property Damage or destruction of property is clearly a major insurance concern following a terrorist event. In addition to loss and damage sustained to the target site, the following are other damages that could result from an attack: Widespread damage caused by falling debris, dust, dispersal of agents Debris removal expense Demolition of surrounding property Environmental monitoring of site Diminution of property value Business shutdown Direct and indirect damage from terrorism can result in business shutdown. Economic impairment As societal fear is one of the main goals of terrorists, any damage and subsequent fear at large that comes from an act of terrorism may cause overall economic damage, which terrorists hope will result in disrupting a country or organization and perhaps bring the targeted group to its downfall.

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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and Insurance Skills Center, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.