NEWS

Companies Purchase Terrorism Insurance at Increasing Rates

By Matthew Harwood

The percentage of U.S.-based companies that have purchased terrorism insurance is at its highest level ever, according to a new market survey.

The report from insurance broker Marsh surveyed 1,382 client firms and found that the percentage of companies purchasing property-based terrorism insurance had increased from 57 percent in 2008 to 61 percent last year.

"Terrorism risk remains a critical concern for global companies," said the report's lead author Ben Tucker, a senior vice president in Marsh's Property Practice. "Recent attempted attacks in New York's Times Square and on a Detroit-bound flight on Christmas day 2009 remind companies of the importance of securing adequate financial protection against the possible catastrophic impact of terrorist events."

The survey provides insight into what sectors of the U.S. economy see terrorism as a real threat to their operations. According to the report, 80 percent of utility companies surveyed reported having terrorism insurance for their properties. Other sectors of the economy with terrorism insurance take-up rates of 70 percent or above are,  in descending order, real estate, health care, transportation, financial institutions, and media.

If the percentage of companies with terrorism insurance indicates the perceived threat of terrorist attack, the Northeast continues to feel it's the most attractive target.

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