For landlord Peter Zagorianakos, terrorism insurance wasn't a necessity until the bombs went off last April at the Boston Marathon and revealed a frightening pattern. Broken windows and a 10-day closure at restaurants and mom-and-pop businesses spurred owners of similar operations across the country to think, "Hey, this could happen to me," said Philip Edmundson, co-founder of William Gallagher Associates, a Boston national brokerage firm. Tarique Nageer, a senior vice president for the insurance broker, attributes part of the gain to businesses responding to Boston. The insurance industry paid $31.6 billion after that year's Sept. 11 attacks, and providers began excluding acts of terror from commercial contracts. In the next 14 months, $15.5 billion of real estate projects in 17 states were stalled or canceled as lenders shunned assets that lacked terrorism coverage, according to a Real Estate Roundtable survey. Fellow Massachusetts Democrat, Sen. Elizabeth Warren, labeled the act a giveaway to insurers at a February hearing, pointing out that providers pay no up-front fees for the federal backing that keeps their prices attractive. Disrupting commerceRobert Hartwig, president of the Insurance Information Institute, an industry group, said the program counters a key goal of terrorists, which is to disrupt commerce. The average cost that an insurance buyer pays for property terrorism coverage ranges from $19 to $49 per million of insured value, depending on the size of the company, according to a 2013 report from Marsh & McLennan, the largest insurance broker by market value.
Reported by SFGate 1 day ago.
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