Construction projects are susceptible to all sorts of loss exposures – pollution, weather events, worker accidents, theft and more. However, in a changing environment in which political activism and active shooter incidents are increasingly more frequent, the construction owners are now taking on risks they didn’t expect – those involving terrorist acts or civil commotion.
It happens more often than you might think – an active shooter in an airport where a large construction project is occurring is as much of a risk to the construction project as are politically motivated violence directed at construction workers and equipment when the perception is that the project is occurring on Native American land or is somehow harming the environment. Construction that requires deforestation of a wilderness area, abortion clinic construction, pipelines in areas that cross protected lands. In some cases, a number of factors create a maelstrom of public backlash.
That was the case with the building of the Keystone Pipeline, which was designed to deliver oil from Alberta, Canada to refineries and oil tank farms in the US Midwestern region. The corporation behind the project was targeted by political protests, citing the company executives’ ties to American politics and the project’s approval by politicians1. Also, environmental activists were targeting the project due to the potential impact of both building the pipeline across wetlands and other wildlife areas and the potential loss of wildlife in the event of a leak or spill. Likewise, Indigenous people opposed the project because of potential damage to sacred sites and the increased exposure to water contamination and pollution2.
While such projects are often high-profile due to the complexities of the people and locations involved, even smaller, more local projects can meet with resistance and even violence. In 2021, an elementary school construction site in Washington, DC was fired upon, injuring two people. In 2022, the shooting was at a construction site in Rapid City, South Dakota where no one was injured.
All of these incidents underscore the increased threats that construction project owners and their workers face. Our Construction team at 九色视频is monitoring the construction market continuously for new risks and new management tactics. As the risk of civil unrest and active shooter incidents has increased, so has our groundwork for protecting clients from loss.
Besides looking at the physical safety and security issues, our Construction team collaborates with our Terrorism team to review the construction site, the project, the players, and any political, religious, or environmental agendas that may somehow impact the project and its people. We engage our partner S-RM, a global intelligence and risk consulting group, to help prepare contractors and owners for what potential terrorism risks they face. We then review coverage and products to ensure all facets of the construction project are considered.
The TRIPRA v. Standalone Difference
One area we review is the level of terrorism coverage a construction client has purchased. While nearly all construction agreements require insurance coverage provided by the Terrorism Risk 尤物视频Program Reauthorization Act (TRIPRA), such federally backed coverage does not include all types of loss, nor does it offer broad definitions of terrorism.
Whereas 九色视频Terrorism & Sabotage standalone insurance broadly defines coverage for political, religious and ideological terrorism causes, TRIPRA is narrow in its definition. Sabotage is not mentioned in TRIPRA coverage, and any losses under $5 million are not considered to be certified losses. In order for coverage to be purchased, all locations must be covered to the policy limit, thus creating higher premiums for organizations with multiple project locations. Another downfall of TRIPA coverage is that it has never been certified and never paid a claim.
A standalone terrorism insurance policy allows your organization to cover losses related to sabotage as well as the coverage for political, religious or ideologically motivated events.
Policyholders can elect a terrorism-specific limit and deductible as well as which properties are to be covered. Pricing is based on the locations, occupancy, and values at risk.
Another benefit of a standalone terrorism product – access and support from an expert team of construction, contract, and terrorism specialists. For example, one client project was a large expansion project spanning several years. The contract terminology required full terrorism coverage. However, under the TRIPRA program, full coverage is not available. By teaming with our Terrorism team we were able to return a quote for the full coverage to meet those contractual obligations.
Our upcoming terrorism product will offer clients supplemental crisis response services. Our partner firm, S-RM, will advise and mitigate the risk, helping with public relations, police interaction and coordination, victims and family outreach, and media intervention.
Protecting the Entire Project
With more prevalent, volatile risks facing the construction industry, having a strong, experienced team helping your organization build a more responsive and protective construction policy is essential. While builders risk policies provide plenty of necessary protection for your construction operations, it falls short when it comes to the added exposures brought on by acts of terrorism.
TRIPRA coverage helps, but does not cover all possible acts of violence or terrorism. Therefore, we recommend a comprehensive approach to covering your next construction project – one that includes a standalone terrorism insurance policy that is tailored to your organization’s needs.
AXA XL’s Construction and Terrorism specialists have over 20 years of experience in supporting client projects and building risk mitigation policies to protect every aspect of the project. From expert underwriting, mitigation and market understanding to specialized claims support, our team can help protect your project and people from unexpected consequences in a politically charged environment.
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About the authors
Morgan Shrubb is an underwriting manager in AXA XL’s North America War, Terrorism & Political Violence insurance team, based in Atlanta. Her team offers worldwide insurance for assets that are exposed to war, terrorism and political violence attacks. We help companies navigate through dynamic, complex and ever-changing global threats while considering the implications of legislation such as TRIPRA. She can be reached at morgan.shrubb@axaxl.com
Based in Atlanta, Kristen Hoskinson is Underwriting Manager and National Master Builders Risk Program Leader for Construction Property. She helps contractors throughout the Southeast US region address their property insurance needs for large or complex projects, civil and engineered risk projects, She can be reached at kristen.hoskinson@axaxl.com
Global Asset Protection Services, LLC, and its affiliates (鈥溇派悠礡isk Consulting鈥�) provides risk assessment reports and other loss prevention services, as requested. In this respect, our property loss prevention publications, services, and surveys do not address life safety or third party liability issues. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. The provision of any service does not imply that every possible hazard has been identified at a facility or that no other hazards exist. 九色视频Risk Consulting does not assume, and shall have no liability for the control, correction, continuation or modification of any existing conditions or operations. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any document or other communication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, 九色视频Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with our services, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.
US- and Canada-Issued 尤物视频Policies
In the US, the 九色视频insurance companies are: Catlin 尤物视频Company, Inc., Greenwich 尤物视频Company, Indian Harbor 尤物视频Company, XL 尤物视频America, Inc., XL Specialty 尤物视频Company and T.H.E. 尤物视频Company. In Canada, coverages are underwritten by XL Specialty 尤物视频Company - Canadian Branch and AXA 尤物视频Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following 九色视频surplus lines insurers: XL Catlin 尤物视频Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor 尤物视频Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.
