Travel Reference
In-Depth Information
Exhibit 1.2
Economic Impact of Terrorist Attack on the World Trade Center,
Dated May 29, 2002
200
Billions
150
100
50
0
Total losses
Loss to economy
of major U.S.
metropolitan
centers
Loss of tax
revenue to
New York State
Source:
GAO review of studies of the economic impact of September 11, 2001.
The insurance industry has been particularly hard hit. Recent esti-
mates have placed the amount of insured loss at approximately $58 bil-
lion. The enormous financial loss to insurance companies will compel
underwriters to require that steps be taken to reduce the likelihood of
financial loss caused by terrorism. Corporations will likely find that their
insurers will exclude terror acts in their policies or require certification
that antiterrorist measures have been taken. Every facility, structure, or
organization that is deemed to be an attractive target for terrorist activity
is being charged more for insurance coverage. For example, small neigh-
borhood synagogues in Brooklyn, New York, have had their liability pre-
miums raised by thousands of dollars per year simply because Jewish
interests and buildings are deemed as being at risk of attack.
The airline industry, which seems to be constantly facing economic
challenges even during relatively mild downturns in the national economy,
was also dealt a severe blow by the 2001 attacks. Many people viewed the
federally funded settlements given to the surviving family members of
the victims of the attacks as a bailout for the airline industry. To collect
the government benefit, the recipients were required to forgo their right
to any other legal action to recover damages, such as suing United or
American Airlines for negligence in not providing an adequate level of
security.
