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Hi there.

I have a client who is seeking to buy stand-alone Terrorism coverage for a property he is buying. Reasons for standalone policy are numerous, but valid, and ultimately unimportant to this question. So here's my deal: The bank is requiring the terrorism to extend to both the Property and Liability coverages. Could anyone give me a situation in which Terrorism coverage would be needed on the Liability piece of the coverage?

Perhaps, and this is a stretch at best, perhaps your client was responsible for the manufactured, installation, service, repair or monitoring of a security system.

And perhaps that system was installed at a location that might be attractive to terrorism. And perhaps that location was indeed struck and it was proven that the system they manufactured/installed/monitored/serviced/repaired was found to be deficient and could/should have prevented the attack.

There likely are others...but that is mine...

Lady Broker - the liability insurer is required to offer Terrorism and the insured can accept or reject. In my area - South Florida- the Terrorism premiums for GL are low, with some carriers providing it at no charge. As for the need to carry, the bank is looking at possible claims arising out of a terrorist act with claimant's lawyers alleging negligence - prior warning, lack of security as mention by another responder, etc. The World Trade Center litigation is still continuing.

Most of our insureds decline this coverage. Our governmental clients take it.

Jim Drake