Mass casualties aren’t just for wars anymore. Let’s put aside “terrorism” for the moment. Think about the carnage over the last week due to corporate negligence and recklessness. There was yesterday’s horrific building collapse in Bangladesh, killing hundreds and injuring thousands of workers making cheap goods for Wal-Mart, while likely being paid about $37 a month. Earlier today, there were explosions on two fuel barges in Mobile, AL, leaving three people severely burned. This follows last week's horrific fertilizer plant explosion in Texas, which “killed at least 14 people, injured 200 and damaged dozens of buildings.” (See more updates here.)
Back to terrorism. Looks like corporate profiteering may play a role here too, at least as victims try to recover. The Wall Street Journal reports today that if the Boston Marathon bombings are officially declared acts of terrorism, the insurance industry would not liable for many business claims and in any event, the industry's liability is capped. They made sure of that 11 years ago. Specifically,
Companies could lose insurance payouts for property, lost income and other damage if the bombings are officially declared an act of terrorism by key U.S. officials, under an 11-year-old law that hasn't yet been tested, according to industry executives and lawyers, as well as city and business leaders in Boston.
The reason: After the Sept. 11, 2001, terrorist attacks, policies sold to business customers typically haven't covered losses stemming from "terrorism" unless the customer pays extra for the coverage. … If there is no terror finding, damages would be covered in general under regular property-and-casualty policies, said Robert Hart wig, president of the trade group Insurance Information Institute.
Large numbers of businesses in the area around the Boston bombings are believed to lack added terrorism protection, though figures aren't yet available, city and state officials said Wednesday. Nationally, about 60% of businesses pay extra for terrorism coverage, with a higher percentage in New York and some other big cities such as Boston, according to industry estimates. But many small businesses forgo high-price terrorism coverage, and Boston's Copley Square is filled with small bars, restaurants and shops.
Rattlesnake Bar & Grill on Boylston Street, which was closed for part of last week, doesn't have terror coverage. Co-owner John Gardner estimates lost business in the tens of thousands of dollars and holds out hope his insurer will cover some losses. He called the possibility that a terror declaration could keep him from getting compensated "the frustration of dealing with insurance companies."
The article makes reference to a law enacted in 2002 after insurance exes marched into the White House demanding the federal treasury provide a “multi-billion-dollar insurance ‘backstop,’ essentially capping the liability of the property/casualty insurance industry, an industry worth hundreds of billions of dollars, in the event of future terrorist attacks.” This was something the heavily-capitalized property-casualty insurance industry did not need. But no one ever said the insurance industry was shy about threatening to pull the rug out from under the U.S. economy to get what it wants, creating an atmosphere of “crisis” to promote its legislative agenda while at the same time escaping any meaningful public scrutiny or regulatory control.
Sorry about that, Boston. (For more, see this study from the Center for Justice & Democracy, "Shakedown: How The Insurance Industry Exploits A Nation In Times Of Crisis." )