"A lot of embassies, consulates and missions, [previous to 9/11] were able to get a package policy for $20,000 from any standard insurance company," he explained.

After 9/11, as companies became more restrictive in their underwriting, they determined that "embassies, consulates and missions are a prohibitive class," in the New York City area at least, he said. The carrier's decision, he noted, was made across the board regardless of the country's standing in the world community.

In meeting with a number of embassy representatives over the past few months, Mr. Meder said Hub found that more than half have opted not to insure because their existing brokers were either not able to provide coverage or coverage was cost prohibitive--as much as quadruple their previous premiums.

Instead of securing insurance in their home country or creating a captive program, typically the diplomats secured insurance in the U.S. because of the high value of the properties, he explained. This is especially true in New York, where a typical embassy in a brownstone is worth no less than $5 million.

"It's definitely in the government's or embassy's best interest to insure that building rather than absorb a loss in that amount and transfer the risk through insurance," Mr. Meder observed.

The program, underwritten by international insurers, requires that the property value be a minimum of $2.5 million. The policies issued are standard general liability and standard property coverage. An option for terrorism coverage is included at the insured's choice.

"In our program we have not come across a problem yet where one country is more difficult or presents more of a risk than another," he noted.

Mr. Meder said the program has been available for the past three months and is not available through any other U.S. brokers. Hub has developed some clients and 10-to-20 additional applications await approval for quotation coverage.

The program has been concentrated in New York, but Hub plans at some point to expand it to other cities, such as Washington, D.C.

"I don't know if this is a national problem, but I know this is a New York problem," Mr. Meder said. "Hub has significant international expertise and we are happy we can offer solutions to this group of clients."