Claims Clarity Post Terrorist Attacks
By Robert Warne - September 17, 2002In retrospect, one year after Sept. 11, clarity begins to define the claims that brought about the largest loss ever experience by the insurance industry.
Despite disputes over business interruption coverage and whether the two jetliners crashing into the World Trade Center constitute two catastrophic events, claims have been paid and carriers have remained solvent.
The Insurance Information Institute (III) credits the ample spread of risk between primary and reinsurance for why the system was able to absorb the enormous losses caused by the Sept. 11 attacks.
Insurance mogul Warren Buffett described to shareholders why Sept. 11 losses were so great. He believes the losses resulted from a fundamental underwriting mistake, in which carriers covered acts of terrorism but never charged a premium for it, reported the Los Angeles Times.
According to III, to date, business interruption stands as the largest segment hit. It currently accounts for $11 billion of the total $40.2 billion loss experienced by the insurance industry.
Although most claims have been paid, there are some business interruption claims from certain businesses such as hotels and airports outside of the disaster zone have been denied. It is expected that the court will have to step in to close many of these claims.
As of June 5, III reported the commercial claim breakdown consisted of 4,748 workers’ compensation claims, 4,476 business interruption claims and 12,366 commercial property claims. | 
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