What is terrorism insurance?

In addition to civil unrest insurance, small businesses should be aware of terrorism insurance.

Before the U.S. attacks on September 11, 2001, business insurance policies usually included terrorism coverage. However, the insured losses of 9/11 were significant — estimated by the Insurance Information Institute, an industry group,  at about $60 billion in 2024 dollars — so insurers began to exclude damages related to terrorist acts from their policies. Even if business owners could find an insurer, the policies were prohibitively expensive. 

As a result, Congress enacted the Terrorism Risk Insurance Act (TRIA). Under the act, the U.S. Department of the Treasury manages a program, called the Terrorism Risk Insurance Program, where the government shares in losses with private insurers in certified terrorist events, making coverage more accessible to business owners. 

Today, terrorism coverage must be purchased separately or added as an endorsement, also known as a rider, to an existing policy. Terrorism policies cover damage or destroyed property resulting from a terrorist attack. 

Notably, these policies only go into effect if the Treasury Department officially declares an event an act of terrorism. To do so, Treasury must find that the act was violent and that the perpetrators acted to coerce U.S. civilians or the government. The act must also cause at least $100 million in total damages. 

Although terrorists have increasingly used technology to attack U.S. citizens and the government, the current laws state that terrorist acts must cause physical damage, so terrorism policies usually exclude cyber-attacks. 

How much does civil unrest or terrorism insurance cost?

Civil unrest or political violence insurance is usually included in a standard BOP. In general, policies cost between $500 and $3,000 per year, but our analysis found that The Hartford’s small business customers pay about $1,000 per year. 

Terrorism coverage must be purchased separately. It costs about $19 to $49 monthly per million of insured value, according to the Insurance Information Institute.  For a $2 million policy, you'll pay anywhere from $228 to $588 per year for coverage.  

How much civil unrest or terrorism insurance does a small business need? 

When deciding how much coverage to purchase, consider the following: 

  • Property: If your building, warehouse or vehicles were damaged, consider how much it would cost to replace them. 
  • Equipment: Consider the cost of other equipment, including computers, copiers, forklifts and other supplies you'd have to replace if they were damaged or stolen. 

Note: If your business is unable to operate normally due to civil unrest or terrorist acts, you may need to cover payroll for a limited period without income coming in. If you have a policy with business interruption insurance, you could have that expense covered as well.

What small businesses benefit most from having small business insurance?

You may not think your business needs civil unrest or terrorism coverage. However, remember that many businesses in and near New York City experienced significant damages and financial losses in the wake of 9/11; even small shops and retailers were impacted. 

Riots and terrorist attacks can happen just about anywhere. But, in general, terrorism policies make sense for businesses that operate within major cities or that are located near financial or government hubs — common terrorist targets. 

Which insurance companies offer it to small businesses?

While most commercial insurance companies include civil unrest coverage under a standard BOP, only a few insurers offer terrorism insurance, including: 

  • AXA XL
  • Chubb
  • Liberty Mutual

How to buy terrorism insurance

To buy terrorism insurance or civil unrest protection, contact your agent; you may be able to buy a policy or add an endorsement to existing coverage. 

If you need a standalone policy, check with an insurer that offers those products. Not all insurers do, but you may be able to get coverage through an insurer like Chubb or Liberty Mutual. 

How can small businesses save on insurance?

To save money on small business insurance, including civil unrest or terrorist coverage, follow these tips: 

  • Establish safety procedures: Document risk management protocols and safety procedures to protect your employees and assets. You may be eligible for discounts if you have security systems or security personnel. 
  • Raise your deductible: Increasing your deductible can lower  premiums. 
  • Get quotes: Rates vary by insurer, so request quotes from several companies. 

How to file a small business civil unrest or terrorism insurance claim

With damages related to civil unrest, contact your agent or insurer right away to begin the claims process. 

With terrorism-related damage, the process is more complicated. Insurance only applies once the U.S. Department of the Treasury classifies the event as a terrorist act, so the claim can't proceed until that happens. However, you should still contact your insurer about the next steps and to get advice on what documentation to collect. If possible, get photos and video of the damages.