Business Insurance and Acts of Terror Conflicts

Business interruption is a problem typically associated with earthquakes, floods and other natural disasters that are usually covered events, provided they are not listed as exemptions in the policy exclusions. After the recent bombings at the Boston Marathon, many business owners are discovering that their business insurance San Francisco coverage does not include acts of terror, which is creating a lot of discussion and is now a hotbed topic.


Damages and police investigations could result in delays


If, for example, you were the owner of a business on Boylston Street in Boston, you more than likely had to close your doors for upwards of ten days, and at huge expense. You may find that you would not get any insurance money if the federal government officially declared the bombings an act of terrorism. And for many local businesses, the days following the Marathon were especially vital in terms of commerce. With your business closed because of the investigation this could severely impact your ability to get back up and running.


What’s more, restaurants and food distributors have additional risks. As a restaurant owner or owner of a business that sold food items, you had the added concern of your precious inventory spoiling or going bad. That’s what happened at one of the steakhouses in Boston that was located close to the second explosion. Everything had to be thrown out.


Businesses tended to buy insurance for unplanned events like this. But after 9/11, Congress passed a law to exclude terrorism from the standard business interruption insurance contract. This is something that you have to pay extra for, and most small companies don’t. Unfortunately, that means if the federal government officially declares the bombings an act of terror, many businesses are going to be responsible for their own losses.


Because of the low percentages associated with terrorism here in the U.S., it’s no wonder that most businesses owners decline to purchase it. But the downside is, that when an incident does occur, like it has for many around the site of the Boston Marathon bombings, they will not have the coverage to kick in. It’s wise to discuss with this issue with your insurance agent to find out how much coverage costs in the event your business is shuttered due to an act of terror. They will help you in evaluating whether this is coverage you should purchase, especially if you are situated in a vulnerable area in a populated city, such as Boston, New York, Chicago, Dallas, San Francisco, Los Angeles, etc.