The explosions Monday occurred near 755 and 671 Boylston St., about four hours and 10 minutes into the Boston Marathon blowing out windows, sending debris into nearby buildings and injuring bystanders.
The bombing that stunned the city took the lives of Krystle Campbell, 29, of Medford; Chinese citizen and Boston University graduate student as Lu Lingzi; and 8-year-old Dorchester resident Martin Richard.
The blasts also caused potentially serious bodily harm to store patrons on Boylston Street and damage to nearby buildings. And now comes the part no one wants to think about yet – insurance. If the owners of heavily damaged establishments like Forum restaurant and Marathon Sports accepted the federally back-stopped insurance guaranteed in all property and liability policies by the Terrorism Risk Insurance Act (TRIA) enacted by the Bush administration after the Sept. 11, 2001, terrorist attack on New York City, well, they’re fine.
And since President Barack Obama declared what occurred on Marathon Monday a terrorist attack, companies without the TRIA endorsement will likely not be covered by their insurance carriers. Obama has also signed an emergency declaration for Massachusetts that opens the gate for additional federal funding as a result of the attack.
The TRIA, as it is known, is automatically included in any and every liability and property policy offered now, said Greg Kerkorian, head of Boston’s GB Kerkorian Partners Insurance Services LLC. That endorsement extends a shopkeeper’s property and liability coverage to bodily harm and property damage as a result of a terrorist act, and store owners must elect to knowingly refuse the insurance, which they can because it does add to the plan’s cost.
But most of Kerkorian’s clients on Boylston Street, which he declined to name, keep the terrorism insurance.
“It’s not an expensive endorsement to accept,” Kerkorian told Banker & Tradesman. “Some people unfortunately have a mindset that if you’re not in New York City, you don’t have the [same risk of a terrorist act]. That obviously was dispelled on Monday. No matter who you are or where you are, nobody is invincible. When we have a proposal for a client, because the premium is generally a negligible charge, we say, ‘Look, let’s not test Murphy’s Law, don’t decline it. It’s part of the overall program. Most of our clients take it.”
So what will happen to those stores that might not have the protections afforded by the TRIA? Let’s look, again, at Sept. 11. Many insurance companies rose to the occasion and responded with providing coverage to companies that weren’t covered before the attack, Kerkorian said. But what will happen in Boston?
A Moral Responsibility?
“If there’s a carrier out there that, given the horrific tragedy of what took place on Monday, and despite the fact that coverage might be excluded if that client didn’t have it … they may feel a moral responsibility to the community anyways,” Kerkorian offered. “But there’s a difference between a contractual responsibility, and a moral responsibility.”
The city of Boston could be feeling that moral responsibility more acutely than anyone. City officials have decided to waive fees for building permits for the businesses that were caught in the blast field of the bombs. The city has also established an online resource center for businesses and residents, including a list of nonprofits and businesses that have donated temporary workspace for affected companies.
Beyond that, the city, along with the governor’s office, has established The One Fund Boston “as a fund to assist individuals affected,” according to a statement from Mayor Thomas Menino’s office. As of 5 p.m. Wednesday, more than $7 million had been committed to The One Fund by corporate partners and individual donors. More than 8,500 individual donors have made donations totaling $500,000 via OneFundBoston.org.
Even so, it was still unclear as of late last week how the funds would be distributed and whether a portion would go toward helping the affected businesses rebuild, according to city officials. Additionally, the city does not have any kind of guidelines available for businesses to about what they can do to ready themselves for a potential future attack of this sort. And Gov. Deval Patrick was unsure if the state had any such guidelines for commercial property or business owners.
“This is a painful and tragic lesson and we will learn from this,” Patrick said when asked if the state would encourage businesses to rebuild with reinforced windows or similar materials to protect their property in the future. But no specific recommendations were forthcoming, he said.
Email: jcronin@thewarrengroup.com
