The recent bombing at a fertility clinic in Palm Springs, California — identified by officials as an act of terrorism — has reopened important discussions around terrorism insurance. For insurance agents, this is a critical moment to understand how such events are classified and which clients may need better protection against these unpredictable and devastating losses.
Who Decides If an Event Is Considered Terrorism?
In the United States, an incident is classified as “terrorism” for insurance purposes under the Terrorism Risk Insurance Act (TRIA), which was first enacted in 2002 and renewed through 2027.
Here’s how it works:
- The Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the U.S. Attorney General, must certify an event as an “act of terrorism.”
- The act must:
- Be violent or dangerous to human life, property, or infrastructure.
- Result in damage within the United States (or to certain U.S. interests abroad).
- Be committed by individuals acting on behalf of a foreign interest or be intended to coerce civilians or influence government policy.
- The financial damage must exceed a set threshold (currently $5 million in insured losses).
Without TRIA certification, most terrorism insurance policies will not be triggered — even if local authorities label an event as terrorism.
However, just because the FBI or local authorities describe an event as terrorism does not automatically activate terrorism insurance coverage.
What Is Terrorism Insurance?
Terrorism insurance is an add-on or separate policy that protects businesses from financial loss due to acts of terrorism. Coverage typically includes:
- Property damage
- Business interruption
- Extra expense
- Some liability components (if included)
Standard commercial property policies exclude terrorism unless it’s added through a certified endorsement.
Which Types of Businesses Usually Carry Terrorism Coverage?
Industries and businesses that tend to be more risk-sensitive or high-profile are more likely to purchase terrorism insurance. These include:
- Financial institutions
- Healthcare providers and hospitals (especially large systems)
- Government contractors
- Hotels, malls, and entertainment venues
- Religious institutions
- Media companies
- Critical infrastructure and energy facilities
Fertility clinics, while not commonly targeted, are part of the healthcare sector and sometimes engage in controversial services (such as in vitro fertilization, embryo storage, etc.). This makes them potential candidates for terrorism coverage, especially in urban or politically sensitive areas.
If the Palm Springs fertility clinic held terrorism coverage, its ability to recover from the bombing, for property loss and business interruption, will depend on:
- Whether the act is officially certified under TRIA, and
- Whether the clinic opted into terrorism coverage when purchasing its commercial insurance.
What Now?
The Palm Springs bombing has opened up a difficult but necessary conversation: What kinds of businesses are genuinely at risk for acts of terrorism? And are we doing enough to protect them?
Here are key points that now feel more urgent:
Reevaluating Risk Profiles
The attack didn’t target a government building or financial institution — it struck a fertility clinic. This incident highlights that any business tied to emotionally charged or controversial topics, such as reproductive services, may face heightened risk, regardless of size or visibility.
Looking Beyond Labels
Just because authorities or media call something “terrorism” doesn’t mean it triggers insurance. Under U.S. law, terrorism must be officially certified by the federal government to activate coverage. That distinction can mean the difference between full recovery and devastating loss.
Considering Location and Symbolism
Businesses located in urban centers, politically sensitive regions, or symbolically significant buildings may be more vulnerable. It’s not just about geography — it’s also about perceived meaning or cultural relevance.
Accounting for Non-Physical Losses
The damage from an attack often extends beyond broken windows. Disruptions to daily operations, reputational harm, psychological impacts, and business interruptions can leave lasting scars, especially for service-oriented sectors like healthcare.
Exploring Resources and Recovery Tools
Local and federal agencies may offer short-term relief, as seen in Palm Springs, where EngagePalmSprings.com and the Small Business Administration are rallying to provide information and aid. However, such support is often temporary and unpredictable, highlighting the value of structured risk planning.
Final Thought
As events like the Palm Springs bombing show, acts of violence, particularly when tied to ideological motives, are no longer confined to predictable targets. Insurance agents must stay proactive in assessing terrorism risk with clients, even in industries like fertility care that might not immediately appear at risk.
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