Terrorism is a highly-defined action in the insurance world, and its application in insurance policies responds to a federal declaration of terrorism. Such a declaration hasn’t been issued in the United States since 9/11, even though many actions, such as the Boston Marathon bombing in 2013, are commonly referred to as acts of terrorism.
Most acts of terror that don’t receive offi¬cial terrorism status from the U.S. government are insured under political violence or vandalism coverage in a commercial property insurance policy. Therefore, it is crucial to know how your policy will respond to protect your business in such a situation.
One area of concern is business income coverage. This coverage is a part of many commercial policies and can pay for lost revenues, temporary facility space rental, and wages to employees. However, this coverage is contingent on a covered property loss; if your building or its contents are not damaged, your policy might not respond.
Talk to your agent or broker about the coverage options available for business income losses due to acts of violence and see if you are insured for this important risk.
