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Know Your Coverages: Malicious Attack, Terrorism, Sabotage

An Unfortunate Necessity

Though it’s a difficult subject to dwell on, the cold reality is that the need for this type of coverage is growing by the day. According to a report released by the U.S. Government Accountability Office in 2023, “incidents of domestic terrorism increased by 357% between 2013 and 2021.” Additionally, an FBI report examining active shootings in 2022 found that the number of active shooter incidents that year increased by 66.7% compared to 2018.

As part of our Property Program, members have access to unique Malicious Attack, Terrorism, and Sabotage coverage but might not fully understand what this coverage entails. Even if you are solely a member of our Workers’ Compensation program and receive Property Coverage from another organization, it’s still important to make sure your organization is protected from these types of risks. In this article, we’ll detail the main components of this coverage.

Defining Our Coverage

First, what does it mean to have Malicious Attack, Terrorism, and Sabotage Coverage? As the name suggests, this type of coverage is meant to aid districts in the event of an act of terrorism, an act of sabotage or a malicious attack resulting in bodily injury, property damage or third-party liability claims. Cyberattacks are not included under this coverage line.

Unlike the federal Terrorism Risk Insurance Act (TRIA), the CSD Pool’s Terrorism or Sabotage coverage is not limited to acts by a foreign terrorist. For the purposes of coverage, an “act of terrorism” means an act or series of acts that include the use of force or violence by any person or group of persons committed for political, religious, or ideological purposes with the intention to influence any government and/or to put the public in fear. An “act of sabotage” means a rebellious act or series of acts committed for the same purpose. These are broad definitions meant to include acts by domestic individuals as well as foreign.

Malicious Attack coverage is triggered in the event a person or group of persons (whether acting alone or in connection with any organization) uses any type of weapon (broadly stated so that it is not limited to a firearm since a weapon could be a vehicle, for example) with the intent to harm another person or damage tangible property. Included is any physical damage caused by law enforcement or security forces responding to the malicious attack; it also includes reimbursement of crisis management expenses such as costs for additional security, counselling, and public relations. Particularly with Malicious Attack coverage, the benefits provided by the CSD Pool can make a world of difference.

Additional Details

Incidents that are the very reason this coverage exists leave a lasting, and costly, toll on the community. It may not be enough to completely alleviate the harm done, Malicious Attack, Terrorism, and Sabotage Coverage can aid in the recovery process.

Both coverages include the cost to repair or replace district-owned property damaged in an attack occurring at any scheduled location. In the event a third-party brings a claim against a district alleging they incurred bodily injury or property damage which arose out of the terrorism, sabotage or malicious attack, the liability coverage may pay for damages the district is legally liable to pay, plus defense costs.

For all coverages combined—Malicious Attack, Terrorism, and Sabotage—the coverage limit, shared by all districts, is $105,000,000 in the aggregate, which is the maximum amount available to cover all claims in any one coverage period. To break it down further, each occurrence/aggregate limits are $100,000,000 for Terrorism and Sabotage: Physical Loss or Damage, $10,000,000 for Terrorism: Combined Liability, and $5,000,000 for Malicious Attack: Physical Loss or Damage & Combined Liability subject to a $10,000 deductible per occurrence in respect of Terrorism and Sabotage and a $5,000 deductible per occurrence of Malicious Attack.

Though it’s impossible to ever truly be prepared for a terrorism or malicious attack event, the CSD Pool can help. For more information about what you can do to insure your district against these types of threats, visit our website at csdpool.org. If you would like to learn more about this or any of our property and liability coverages, you can schedule a chat with our underwriters by emailing email us at pc@csdpool.org.

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