NU Online News Service, Sept. 9, 11:12 a.m. EDT
Because terrorist acts have unique characteristics that are unlike natural disasters, traditional loss-prevention tools often fall short when preparing for this risk, according to the Insurance Institute for Business & Home Safety (IBHS).
The 10-year anniversary of the Sept. 11, 2001 attacks presents an ideal time to review how attacks are mitigated, and to look at terrorist acts in a different way than natural hazards, IBHS says, adding that a hybrid approach to preparation can reduce the physical, economic and psychological damage that terrorists seek to inflict.
"The hybrid approach of combining structural mitigation and business continuity is something we are seeing a lot more of across the board," Debra Ballen, general counsel and senior vice president of public policy for IBHS, tells NU Online News Service.
With respect to terrorism, a lot of structural mitigation is outside of the abilities of the individual business owner, she says, adding that there has been more emphasis on business-continuity planning.
In fact, a recommendation made by the 9/11 Commission, she says, was for business continuity, which needs to be part of the equation in managing terrorism risk.
"The beauty of continuity planning is that it's not peril-sensitive," she explains. "We encourage businesses to conduct a hazard analysis."
While some parts of the country are at greater risk for terrorism than others, she says, every part of the country carries at least some risk.
Ballen adds, however, that it is also important for businesses to recognize that terrorism risk is different from other risks because while a hurricane may change its course, "terrorists have a target." Businesses don't have time or a warning to prepare."
Julie Rochman, president and CEO of IBHS, says in a statement, "The underlying, unique characteristics of modern terrorism cause traditional property and casualty loss-prevention tools and techniques to fall short with respect to this still very real and present risk."
She notes, "While physical security improvements in high-occupancy buildings and other public/private infrastructure will help protect the nation in the event that terrorists break through our protective defenses, there are limitations to what can be achieved through building science."
Rochman adds, "We need to create a culture that truly values preparedness and resiliency as a corporate, community and individual responsibility. We must recognize that preparedness and planned resilience are critical to long-term survival and economic well-being."
Ballen says risk managers have given terrorism risk much thought "because it's an important part of their job."
She adds that they need to make sure they have the necessary financial tools by working with an agent or broker to see that they have the right insurance package.
Terrorism-risk-management strategy also must "rely on the financial protections in the Terrorism Risk Insurance Act and not solely on private-sector protections," Ballen emphasizes.
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