At the 2018 RIMS Annual Conference, Drew Olson from BDO USA LLP discussed insurance lessons from past terrorist attacks.
The Boston Marathon Bombing shut down the city for a period of time, which resulted in over $333 million in economic damages to the city. One of the big insurance challenges for this was business interruption coverage. Most business owners were able to collect since the city government had ordered businesses to close and people to stay home while the manhunt for the bombers was ongoing.
In November 2015, the Paris attacks killed over 130 and injured over 300. This caused nearly $2 billion in economic damages to the city, especially in terms of a significant loss of tourism business. That loss in tourism dollars is not an incurable risk.
In March 2016, the Brussels attacks killed 32 and injured 320. It further declined tourism throughout Europe, especially in France. Again, this is not an insurable loss.
The Orlando Pulse Nightclub, San Bernardino, and Las Vegas Mandalay Bay shootings were fairly straightforward from an insurance standpoint in that they involved workers’ compensation, liability and business interruption policies. There was limited impact on the surrounding businesses and community from these events.
One of the biggest concerns in the future is cyber terrorism. This could cause significant business interruption, which is insurable. However, if a cyber attack was determined by the U.S . government to be a terrorist attack, it could impact the insurance coverage because some policies specifically exclude certified terrorist attacks.
Another concern for the future is using autonomous vehicles for terrorist attacks. We have seen vehicles used frequently in terror attacks and a self-driving vehicle attack could take this to a different level and make it very difficult to track down the person responsible.