Governor Walz may have dealt the final blow to businesses impacted by the George Floyd protests that turned into riots in the Twin Cities this past week when he referred to the activities happening late in the week as acts by “domestic terrorists”.
Typically riots, civil unrest or commotion, and vandalism are covered perils in all business owners and commercial property insurance policies. Before 9/11 terrorism was also included in standard policies, but now terrorism coverage is generally offered on its own and often for a hefty price, leaving many business and property owners no choice but to pass on it.
After 9/11 the Terrorism Risk and Insurance Act (TRIA) was created allowing private insurers to issue terrorism coverage policies that are “backstopped” or reinsured by the federal government.
When Governor Walz designated the actions of rioters as “domestic terrorism” he put most businesses, and likely all of the small businesses attacked over the last week at risk of having their damages NOT covered by their business or commercial property insurance.
Under TRIA the Secretary of the Treasury must declare the terror attack a “certified act” to trigger terrorism coverage.
The fate of many businesses may rest on that declaration.
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