Insured property losses unlikely to breach $1m, says risk modeller
Risk modelling firm Risk Management Solutions (RMS) expects insured losses from Monday’s Boston Marathon bombings to be less than £1m.
But it adds that the costs of business interruption as a result of security restrictions after the bombings may be a larger source of claims.
Two explosions went off at the finish line of the Boston Marathon on Monday, killing three people and injuring 144.
According to RMS, most of the property damage appears to be within 10ft to 20ft of the explosions.
The risk modeller said that street events like the marathon are inherently vulnerable because, while there are very large crowds, public access is unrestricted.
RMS catastrophist Gordon Woo said: “Terrorism risk is best mitigated by counter-terrorism forces interdicting plots before terrorists move to their targets. Fortunately, this happens with more than 90% of US and UK plots.
“However, plots involving a small number of operatives, such as seems to be the case with the Boston bombing, are the most difficult to prevent. Terrorism attacks remain a very real threat; there have not been larger attacks only because of the success of plot interception.”
Woo added that the insurance of other sporting events is likely to be influenced by the Boston Marathon bombing. He said: “The shortage of terrorism insurance cover in the years after 9/11 led to the securitisation of the cancellation risk of the 2006 FIFA World Cup. So while the property insurance loss is small, the Boston Marathon bombing may well have a significant influence on the terrorism insurance market.”