Environmental Financial Assurance for Terrorist Attacks

Picture of By Chris Bunbury, eS
By Chris Bunbury, eS

Chris Bunbury is an Environmental Strategist and President of Environmental Strategist, Inc. (ESI), located in LeLand, Michigan. He graduated from Michigan State University with a Bachelor of Science degree in Natural Resources. In 1988, he worked in the commercial property and casualty insurance industry as a retail commercial insurance producer. As the environmental insurance industry evolved, it was a natural transition for Chris to move into this evolving field.

Disclaimer:  This article is focused solely on addressing the financial implications of terrorist attacks and does not provide an overview of any moral, social, or political issues. 

As terrorism activities grow more prevalent and the risk landscape evolves, a pressing concern arises regarding the potential pollution liabilities stemming from terrorist attacks in the United States. In this blog post, environmental Strategist emphasizes the importance of addressing environmental financial assurance to mitigate the financial impact of such threats. 

Understanding the Risks 

Terrorist organizations today are better financed and armed than ever before. With the billions of dollars and equipment left behind in the Afghanistan withdrawal and the release of billions of dollars to Iran, the resources available to terrorists have substantially increased. Additionally, political leaders have acknowledged an unprecedented rise in the number of terrorists entering the United States. 

The Role of Terrorism Risk Insurance Act (TRIA) Coverage 

To mitigate the financial impact of terrorist attacks, it is crucial to understand the coverage provided by the Terrorism Risk Insurance Act (TRIA). Under this act, certified acts of terrorism, as determined by the Secretary of the Treasury, must result in insured losses exceeding $5 million. These acts involve violence or actions dangerous to human life, property, and infrastructure, carried out by individuals aiming to coerce the civilian population. 

The Importance of TRIA Coverage in Environmental Financial Assurance 

Due to the changing risk parameters associated with pollution losses from terrorist attacks, insured parties should consider investing in TRIA coverage as part of their environmental financial assurance strategy. Currently, approximately 25% of environmental insurance policies placed by Environmental Risk Managers, Inc. (a national environmental insurance wholesaler) for retail insurance agents include TRIA coverage. The additional cost for TRIA coverage is minimal, usually just a few percentage points of the premium. 

Long-Term Effects and Considerations 

Considering the long tail exposure of pollution liabilities, it is imperative to protect against potential financial losses resulting from terrorist attacks. For example, the environmental consequences of the 9/11 attacks continue to impact individuals, with more people dying from toxic exposures than in the initial attack itself. The lingering effects of pollutants like PFAS Chemicals, Lead, Asbestos can persist for several generations.

Take a Proactive Approach 

The evolving threat of terrorism and its potential impact on pollution liabilities necessitates a proactive approach. By considering TRIA coverage as part of their environmental financial assurance strategy, insured parties can safeguard against the potential financial burdens resulting from terrorist attacks. An Environmental Strategist emphasizes the importance of this coverage and encourages insurance agents and insureds to assess their risk exposure and make informed decisions to protect their assets and interests. 

While a particular business may not be the direct target of a terrorist attack, it is essential to consider the impact on neighboring businesses that could be targeted as well. To learn more about protecting your business and understanding environmental liabilities, visit www.riskeducation.org/who-are-your-neighbors/.

Additionally, if you sell or purchase cyber insurance, it is important to explore the topic of Pollution Liability Coverage for Cyberattacks, which can be found at www.riskeducation.org/do-your-clients-need-pollution-liability-coverage-for-cyberattacks/. 

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