Miami Beach Buys Insurance for Terrorism, Active Shooter Incidents
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Miami Beach Buys Insurance for Terrorism, Active Shooter Incidents

After 9/11, local governments began tightening security like never before. Surveillance cameras now monitor nearly every inch of municipal buildings, while courthouses have beefed up their entrances with TSA-style checkpoints. In an urgency to protect residents and employees, some architects even began designing government buildings specifically to prevent mass shootings, acts of terror, and other crises.

But planning for those attacks often falls on city officials, who are forced to make tough calls about gruesome realities. In the latest depressing sign of the times, Miami Beach leaders recently signed an insurance policy protecting the city for up to $100 million of catastrophic property damage in cases of terrorism or an active shooter.

"To address a potential threat posed by those who wish to harm critical city infrastructure, we intend to strengthen our property program," says a letter from City Manager Jimmy Morales.

The $28,500 policy, signed June 1, uses broad definitions of an active shooter situation as well as a terrorist attack, which would include any act of force or violence by someone intent on putting the public in fear for ideological reasons. The active shooter provision would cover crisis management and public relations, counseling, medical expenses, relocation costs, and temporary security in the event of a shooting on city property.

Insurance companies began offering terrorism policies after the September 11 attacks left New York City with more than $25 billion of insured property loss. In 2002, then-President George W. Bush signed a boring but important law that said the government should help cover some of the costs of damages resulting from terrorist attacks. But the so-called Terrorism Risk Insurance Act hasn't really helped anyone so far: To trigger payouts, damages must exceed $5 million and the president himself must call the act "terrorism," so even high-profile killings like the Boston Marathon bombings and the mass workplace shooting in San Bernardino haven't met the qualifications.

Instead, some cities are now opting for stand-alone policies like the one Miami Beach chose. Though terrorism coverage is still a growing trend for local governments, an estimated 60 percent of commercial property owners already have the policies.

And active shooter insurance is still a relatively new market. After identifying mass shootings as a potential gray area, insurance companies began offering special coverage in 2015. Originally, the policies were designed with schools and universities in mind, but sadly, everyone from hospital administrators to amusement park operators has started asking for coverage.

"When you look at Sandy Hook, Virginia Tech, these can be very significant events, and people need to be prepared," Southern Insurance Underwriters president Hugh Nelson told the Insurance Journal. "This policy brings a whole realm of experts to bear for the situation and provides an additional primary layer of insurance."

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