Biomedical Engineering Reference
In-Depth Information
Although the act's definition of “insured loss”
does not exclude losses from nuclear, biological, or
chemical perils, losses resulting from certified acts
of terrorism involving those perils are only covered
“if the coverage for those perils is provided in
the primary or excess property and casualty policy
issued by [the institution's] insurer.”
80
The act does
not prohibit an insurer from excluding coverage
for nuclear, biological, or chemical perils if the
same exclusions are also applied to losses arising
from events other than acts or terrorism, and if
the exclusion is permitted by state law.
81
Although
TRIA temporarily
82
ensures the availability of
some coverage for losses due to terrorism, the act
is not comprehensive even in the limited terrorism-
risk insurance arena.
two main sources of protection for the institution
in the event of a natural disaster. Property insur-
ance will cover the cost of damage repairs, while
business-interruption insurance will cover the loss
of business income.
Two types of business-interruption coverage are
available: named perils and all-risk policies. The
former provides protection only for specifically
named perils, while the latter provides coverage
for all perils
except
those specifically excluded.
The two types of insurance generally are purchased
as a package, and the same perils will be covered
under both policies. It is important to note that
two common exceptions to property insurance are
earthquake and flood damage.
Coverage for these events typically can be
added for additional fees. In fact, in certain areas,
flood insurance may even be required.
84
Ensuring
adequate insurance coverage is an important means
to survival following disaster.
Natural-Disaster Risk Management
Recent focus has been on emergencies resulting
from acts of terrorism. Historically, however,
disasters
not
related to terrorism have been
the primary cause of public health emergencies.
Natural disasters (e.g., earthquakes, floods, hurri-
canes, and tornadoes) may have a devastating
effect on businesses. According to the Insurance
Information Institute, more than 30% of businesses
never reopen following closure due to hurricane,
tornado, flood, or other disaster.
83
Commercial-property insurance and business-
interruption insurance typically will provide the
Appendix A.C
Securing Disaster Funding
Disaster assistance for businesses is coordi-
nated through the Small Business Administra-
tion (SBA).
85
In order to qualify, the business
must be in a declared disaster area.
86
Two types
of disaster declarations activate SBA disaster-
assistance efforts: Presidential Declaration and
80
Interpretive Letter from Jeffrey S. Bragg Executive Director of TerrorismRisk Insurance Program, to Mr. D. (Mar. 24, 2004),
available
at
www.treasury.gov/offices/domestic-finance/financial-institution/terrorism-insurance/pdf/redactedci.pdf (last visited Sept 20, 2004).
81
Id
.
82
See
Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, § 108, 116 Stat. 2322, 2336. (stating that the Terrorism Risk
Insurance Act of 2002 will terminate in December 2005).
83
Press Release, Insurance Information Institute, Can Your Business Survive a Natural Disaster? Advance Planning, Proper Insurance
are Essential (Apr. 13, 2004),
available at
www.iii.org/media/updates/press.736350/ (last visited Sept. 20, 2004).
84
Flood insurance is underwritten by the National Flood Insurance Program, which is managed by the Mitigation Division of the
Federal Emergency Management Agency. In areas deemed by the National Flood Insurance Program to be at high risk for flooding,
flood insurance is a prerequisite to obtaining secured financing to buy, build, or improve structures.
See
Fed. Emergency Mgmt.
Agency,
Flood Hazard Mapping, Insurance Professionals and Lenders, at
www.fema.gov/fima/nfip.shtm (last visited Sept. 21, 2004);
Fed. Emergency Mgmt. Agency,
Mitigation Division, at
www.fema.gov/fima/ (last visited Sept. 27, 2004); Nat'l Flood Insur-
ance Program, Program Description, Mandatory Flood Insurance Purchase Requirement 29 (Aug. 1, 2002),
available at
www.fema.gov/doc/library/nfipdescrip.doc (last visited Sept. 21, 2004).
85
See
U.S. Small Business Admin.,
About Small Business Administration, at
www.sba.gov/aboutsba/index.html (last visited Sept.
21, 2004).
86
See
13 C.F.R.§§123 2-1233 (2004); Understanding How Disaster Declarations Are Made,
supra
note 52.
