What is the value of tangible insurance protection that is being illustrated?

As treasurers and risk managers are discovering, stand-alone terror coverage now costs as much as all other forms of property insurance combined. Until recently, a $100 million property policy (including terrorism coverage) might cost as little as $200,000, says Bob Smith, Northeast regional executive officer for insurance broker Willis. Today, the same policy costs anywhere from $400,000 to $600,000 — and excludes terrorism risks. To get an added $25 million of terrorism coverage, Smith says, a buyer might have to pony up an additional $500,000.

That’s putting terroism coverage out of reach for many companies. Even if insurers come down on their prices — and that’s not real likely — few mid-sized businesses will be able to afford terror coverage. “You could sell me the Hope Diamond at 50 percent off, and I still couldn’t afford it,” says David Mair, director of risk management for the United States Olympic Committee (USOC) and president of the Risk and Insurance Management Society

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