• 'Act of terror' certification could cost businesses impacted by bombings


    BOSTON (MyFoxBoston.com) -- Boston businesses that lost revenue and sustained damage in the Marathon bombings could have a difficult time recouping those losses due to a lack of "terrorism" coverage under their insurance.

    The Terrorism Risk Insurance Act of 2002 was passed by Congress as an act to "ensure the continued financial capacity of insurers to provide coverage for risks from terrorism." Under the bill, the secretary, secretary of state, and the attorney general must certify an act of terror so that liability can be determined.

    The bill was extended in 2007 with the Terrorism Risk Insurance Program Reauthorization Act. The reauthorization was introduced by two lawmakers from Massachusetts, Rep. Michael Capuano and retired Rep. Barney Frank.

    According to the Boston Globe, such a certification could be problematic for Boylston Street businesses impacted by the bombings. Some of the businesses do not have specific coverage for terrorism with their insurance providers, which could make receiving reimbursement much more difficult.

    The newspaper points out that while many policies do pay for losses as the result of closure, the coverage has hardly ever been enacted as a result of an attack.

    Boston Mayor Tom Menino expressed his confidence Saturday that President Barack Obama will not approve anything that could hurt the businesses impacted by the blasts.

    "He won't sign anything that would hinder them from collecting insurance or any other benefits," says Mayor Menino.

    One Boylston Street business owner tells FOX 25 he took a risk by not getting terrorism insurance.

    "This is a terrorism act, and we're not gonna change the rules because people want to recoup money from the insurance companies," says David Sapers, owner of Sugar Heaven.

    Sapers he still wouldn't pay for the coverage and the government should step up.

    "The same way the government could give us the money too," says Sapers. "I mean, they have a fund they raised all this capital for, they could put part of that money allocated toward small businesses here."

    An analysis conducted by Marsh and McLennan New England for the Globe shows that small to medium-sized businesses paid about $49 per $1 million of insured value in 2012.

    Mark Bollman, President and Founder of "Ball and Buck," says terrorism insurance was a relatively small price to pay for the peace of mind they have now.

    "When you look at what the incremental cost is over your full policy, it's like 10-percent or less; so in an instance like this, you're certainly happy you have it," says Bollman.

    Two weeks after the April 15 bombings, the insurance brokerage company "Marsh" reported that about 77-percent of businesses in the Northeast own terrorism insurance. That is the highest of any region in the nation.

    Marsh also notes that if the reauthorization act were allowed to expire, fewer insurers may offer such coverage and the cost could go up.

    While President Barack Obama said shortly after the attacks that the FBI was investigating them as an "act of terrorism," the administration has not officially certified the bombings.

    Under sec. 102 of the TRIA, here is the definition of an "act of terrorism:"

    (A) CERTIFICATION:- The term 'act of terrorism' means any act that is certified by the Secretary, in concurrence with the Secretary of State, and the Attorney General of the United States--
    (i) to be an act of terrorism;
    (ii) to be a violent act or an act that is dangerous to--
    (I) human life;
    (II) property; or
    (III) infrastructure;
    (iii) to have resulted in damage within the United States, or outside the United States in the case of--
    (I) an air carrier or vessel described in paragraph (5)(B); or
    (II) The premises of a United States mission; and
    (iv) to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States government by coercion. **Please note: The 2007 reauthorization removes "acting on behalf of any foreign person or foreign interest."

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