Many people are still trying to figure out what happened on Sunday evening at the Route 91 Harvest Music Festival in Las Vegas. Clearly, we all know that so far 59 people have been reported dead and hundreds injured. The one debate all over social media that goes beyond gun control is whether to label the incident terrorism.
This matters for a number of reasons, but in this particular case it can matter for insurance purposes. Insurance policies, particularly commercial policies, exclude terrorism related losses unless it is specifically endorsed back onto the policy. So, whether this incident or another incident that seems to have many of the hallmarks of terrorism is officially called terrorism, it could have a direct impact on you and your business.
Just because people feel terrorized, does not legally make an incident terrorism. The generally accepted term for terrorism requires political, religious, or ideological motive. For example, NATO's definition is "The unlawful use or threatened use of force or violence against individuals or property in an attempt to coerce or intimidate governments or societies to achieve political, religious or ideological objectives". The US Government's definition is very similar for foreign threats and the definition is a little cloudier for domestic terrorism. At this time, the authorities are still looking for a motive for the Las Vegas shooting.
If you have a commercial policy, look for the acronym TRIA. TRIA stands for Terrorist Risk Insurance Act. For it to be deemed terrorism the Secretary of the Treasury needs to certify it as such. So if a mentally unstable person decided to blow up or arson your factory you would be covered under a typical commercial building policy. If the same incident happened with political, religious, or ideological motives and certified as terrorism you would not have coverage unless you elected TRIA coverage or is specifically included in your policy.