Every NH business has had to contend with the seemingly endless paperwork required when buying business insurance. This is regardless of whether you are a self-employed contractor in Milford, a restaurant owner in Nashua or a large manufacturer in Manchester. The amount of questions and forms required to get commercial business insurance can be daunting.
The insurance professionals at HPM Insurance have seen that look from a client. That look is a silent, pleading look that seems to beg the paperwork and coverage explanations to stop. Being thorough is not intended to be a form of torture, but rather an attempt to explain the risks your business could face and how your business policy will or will not respond if there were a loss.
One of the most glossed over coverages I have seen during my insurance career is terrorism insurance coverage. Why? Because I believe we like to think that terrorism will never happen in a small place like New Hampshire. Though Boston may be a more plausible target for a terrorist attack, I wonder how many Boston businesses impacted by the bombing glazed over this coverage as well.
The availability of terrorism insurance began being offered to anyone buying a commercial policy with the Terrorism Risk Insurance Act of 2002 (TRIA). The act states that all commercial entities have a right to purchase insurance coverage for losses arising out of acts of terrorism, as defined in Section 102(1) of the Act. This means that anyone who purchases a commercial policy must sign a disclosure form acknowledging the receipt of the offer and check off whether coverage is elected or rejected.
There are many specific conditions for Terrorism Risk Insurance to cover an act of terrorism, like the act being defined as terrorism by the Secretary or the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States. There also has to be at least $5 million of aggregate property and casualty losses.
The point of this blog is not to try to convince NH business owners to buy or not buy terrorism coverage; however it is important that you understand what you are or are not buying with every coverage that can impact your business. The TRIA requires that all commercial business owners sign-off on rejecting or accepting terrorism coverage. This fact should give you pause to at least consider what you do, and not simply sign your name without reflection.
Understanding your risk and coverage after a loss is too late. Given your business is something you care very deeply about, take the time to understand all aspects of your coverage from terrorism to liability limits to building coverage, and make an informed decision about the risk. You would not want to be kicking yourself after a claim thinking if I had only spent more time.....