Survey: Building Owners Go Bare On Terror Cover

NU Online News Service, Sept. 24, 9:49 a.m. EST?Twenty-seven percent of property owners and managers in a survey said they were self insuring or "going bare" for terrorism coverage for all or part of their portfolios.

Building Owners and Managers Association International said that was the "most disturbing" finding in its survey of membershipBOMA's poll focused on the availability of terrorism insurance in today's marketplace. BOMA is a Washington, D.C.-based advocacy, educational and research network of the commercial real estate industry.BOMA said 27 percent of the respondents said they could not obtain terrorism insurance at any cost.

Of the remaining 73 percent who were able to find coverage, 80 percent incurred higher premiums, caps on coverage, higher deductibles, cancellation clauses of 60 days or less, and/or exclusions for chemical, biological or radiological acts, according to BOMA.

The premium increases incurred by building owners ranged from an average low of about 20 percent to a high of 200 percent. About 80 percent of the responding building owners said they are passing at least some of the costs on to tenants, BOMA reported.When asked which factors most negatively affected their ability to purchase terrorism insurance for portfolios, the survey respondents rated:

? Building profile--36 percent "much more difficult," 32 percent "somewhat more difficult."

? Geographic location--26 percent "much more difficult," 43 percent "somewhat more difficult."

? Amount of reinsurance available at renewal--47 percent "much more difficult," 21 percent "somewhat more difficult."

? Location within a city, such as near high-profile sites--38 percent "much more difficult," 29 percent "somewhat more difficult."

? Building size--31 percent "much more difficult," 30 percent "somewhat more difficult."

? Tenant mix--19 percent "much more difficult," 28 percent "somewhat more difficult."

? Replacement cost--33 percent "much more difficult," 21 percent "somewhat more difficult."

As to which factors helped them negotiate more favorable rates or terms, 49 percent of the respondents said that nothing helped, 28 percent said that providing insurers with detailed building data and insurance history helped, and 24 percent said increased security helped somewhat.

Other factors cited included long relationships with insurers and timing of renewals, BOMA reported.

The survey results will be used to continue pressing Congress for immediate legislation to provide a federal backstop in the event of future terrorist attacks, BOMA said.

Special Reports /

Survey: Building Owners Go Bare On Terror Cover

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