What Is Terrorism Insurance?

What Is Terrorism InsuranceThe responsible business owner gets insurance for their business and its employees before they’ve hired the first employee to the ranks or signed their first contract. Most business owners will opt for commercial property insurance, which covers most of the risks that you might encounter as a business owner; sometimes this also includes other forms of insurance, including business income insurance, that will protect you if your income were to be affected.

What is terrorism insurance? Another form of insurance that you might need as a business owner is called terrorism insurance, and you won’t realize that you have needed it until you do. Terrorism insurance hit the spotlight for businesses after 9/11 – but you might never have thought that you needed it before now. Here’s why you could use terrorism insurance for your business, and just what type of events will be covered.

Acts Of Terrorism

Broadly defined, acts of terrorism can include an event as shocking and fatal as 9/11 – and this, if it should ever happen to your business, can result in millions upon millions worth of damages, claims and losses for your business. It can add up to astronomically large amounts, and terrorism insurance means that you will be covered for the result of any terrorism act that results in damages or claims.

Expanding the Definition

What is terrorism insurance? Spreading the definition a little broader, we can also say that acts of terrorism can include other threats to your business – such as a bomb threat called-in that manages to put your business out of action for a few days. This is also an event that should likely be covered under your terrorism insurance policy.

Think It Can’t Happen?

Right off the top of your head, guess how many terrorist attacks you think there have been within the last few years in the United States. Now guess a slightly higher number than your original. Just between 1995 and 2014, it’s estimated that there were more than 500 terrorist attacks in the United States – and that’s only events that can be classed as full-on terrorist attacks.

Add on-to that any acts that can be classed as terrorism, and we’re looking at a much higher number – and a much higher risk for you and your business. There are some things that, of course, can increase your risk factor of being hit by a terrorist attack – these things include the location of your business (for example, if it is close by to a political center or near to an embassy), and the type of business that you have: Transportation business, for example, could be seen as susceptible and more in need of such coverage.


To be classed as an event of terrorism, the event will have to be certified as an event or act of terrorism by the authorities. Keep in mind that this is a sometimes-lengthy process that could take months, and the an event or act of terrorism by the authorities. Keep in mind that this is a sometimes-lengthy process that could take months, and the certification (or lack thereof) can immediately affect what you are able to claim for.

The Contract and Lease Requirements

Certain business deals will require that you have terrorism insurance upfront – and this will usually be listed on your contract. The same is true for certain lease contracts which will specify whether or not terrorism insurance is a legal requirement for the business.

Ethan’s Last Word

Make sure you understand what is terrorism insurance, so you can make a decision to buy this coverage of you need it.

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