Terrorism and the war against it have taken a tremendous toll on the American psyche. For starters, terrorism has changed the way we view the world and many of its inhabitants.
Not to mention how they view us.
And there are the financial costs — some huge and obvious, some smaller and hidden.
I ran across an example of the latter last week as the Port of Everett commissioners went over their insurance costs for next year. There was liability insurance, coverage for property damage and vehicles, and even some premiums in the event that officials of the agency get sued in connection for some decision or action.
That’s all typical stuff for public agencies.
But there was also another type of coverage, one that wasn’t on the port’s radar screen before Sept. 11, 2001: terrorism insurance.
For 2004, the port will pay $27,000 to cover its potential losses to terrorism. It paid $25,000 last year.
That’s not a lot of money, really. It’s about 6.5 percent of the port’s total cost of $414,789 for insurance next year.
But when you start adding up the cost of all the public agencies across the country that might be terrorism targets, you’re talking about a big chunk of change.
"Terrorism and security issues are just major in this marketplace," said Deborah Bovee of Aon Risk Services, which secures the port’s insurance. "For every single line of coverage, you have to make a decision about whether you purchase terrorism insurance or not.
Bovee said the port is covered "whether it’s a garden-variety head case or a full-blown terrorist incident." It has $1 million of primary coverage and another $49 million through an umbrella policy.
Karen Clements, the port’s finance director, said specific terrorism coverage is important because after the 2001 terrorist attacks, insurers started excluding acts of terrorism from their coverage.
"They also started getting pretty broad in their definition of what it might be," she said. "They started excluding some things they’d covered in the past. We call it buying back the coverage that they’ve excluded."
She noted that the port isn’t just sitting back and hoping it’s not the subject of an attack. It’s using a federal grant to add a lot of fencing and to take other security measures to lower its risks.
Even so, its insurance bill for terrorism went up for 2004.
Last year, I wrote about the rising cost of insurance because of the Sept. 11 attacks. But I’m writing about it again because it looks like it’s become a fixture of our society.
"I think this will probably continue in the future unless there’s a big change in the world and how things are happening in the world," Clements said.
It would be easy to accuse insurance companies of simply trying to profit from the situation. While you have to factor some of that into the equation, there’s no doubt that insurance companies weren’t prepared for Sept. 11. Many suffered huge losses. Some have gone out of business. Others are teetering on the brink of insolvency.
"There have been several really good insurance companies that have gone out of business or been bought out or had their rating lowered," Clements said.
So it’s not surprising that the remaining companies have put a price tag on terrorism that we all have to pay.
It’s one of the added costs of being a target for the rest of the world.
Mike Benbow: 425-339-3459; benbow@heraldnet.com.
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