Operators should discuss terrorism risks with insurers

By Thomas D. DeMatteo

In May of this year, the Transportation Security Administration (TSA) issued an unclassified report warning owners, operators and rental agencies to protect their commercial vehicles from theft.

The TSA report is titled “Vehicle Ramming Attacks: Threat Landscape, Indicators, and Countermeasures.”

Commercial vehicles are of particular interest to terrorists because they can easily penetrate security barriers and cause significant damage and casualties. Plus, they have exceptional and routine access to locations where large numbers of people congregate, such as sports complexes, shopping centers, entertainment venues and promenades.

According to the TSA report, commercial vehicles may be obtained for terrorist activity in a variety of ways, including:

  • Insider threat – authorized commercial vehicle driver carries out or facilitates the attack
  • Hijacking – attacker gains control of a commercial vehicle by force
  • Theft – attacker steals a commercial vehicle
  • Rental – attacker rents a commercial vehicle
  • Purchase – attacker purchases a commercial vehicle

The TSA has also issued a counterterrorism guide for motorcoaches, which is available from the agency and the United Motorcoach Association.

The guide, among other important information, stresses hijacking prevention and recommends the following security measures:

  • Ensure only ticketed passengers are allowed on the bus.
  • Adopt a “no stop” policy when possible, especially within two or three hours of trip origin.
  • Follow en route tracking and communications protocols.
  • Conduct pre-trip and post-trip inspections of your motorcoach.
  • Know or learn the route, especially if it is a new one or has a pickup or drop-off location never visited before.
  • Do not assume technology such as the Global Positioning System (GPS) will not fail, and identify a backup plan in case of failure.
  • Be aware of safe areas in case you are being targeted. Park in secure areas with ample lighting.
  • Carry a 24-hour emergency telephone number at all times.
  • Inform the dispatcher of your route and ensure route compliance. If the route changes, inform appropriate personnel.
  • Remember, there is safety and security in motion. The most dangerous time for hijacking is when a motorcoach is stopped. Lock the motorcoach and close the windows when parked or in slow-moving traffic.
  • Unlock the motorcoach for as short a time as possible when stopped to rest or eat.
  • Stop only in designated rest areas where other vehicles are parked.
  • Do not stop to help motorists in trouble, but call for assistance.
  • Be aware of your surroundings. Watch for suspicious vehicles at the pickup point, cars or vans that follow the motorcoach on the highway or anything that seems out of line.
  • Keep the motorcoach license plate numbers and vehicle identification number (VIN) with you at all times for the motorcoach you are operating. They will be critical for law enforcement if the vehicle is stolen or hijacked.

Now that we have framed up the topic, let’s move in to the subject of commercial terrorism insurance. But first we need to define “terrorism” because the definition is critical to understand insurance coverage for terrorist activities.

The Department of Homeland Security defines terrorism as a “premeditated threat or act of violence against noncombatant persons, property and environmental or economic targets to induce fear or to intimidate, coerce or affect a government, the civilian population, or any segment thereof, in furtherance of political, social, ideological or religious objectives.”

The federal Terrorism Risk Insurance Act (TRIA) requires all U.S. property and casualty insurers to offer terrorism coverage. About 60 percent of the companies purchase this coverage, according to the Insurance Information Institute.

A typical terrorism policy supported by TRIA covers damaged or destroyed property, plant equipment and inventory. However, in order for terrorism coverage to apply, the act must be certified by the Secretary of Treasury along with the Department of Homeland Security and the U.S. Attorney General.

Stand-alone policies not supported by TRIA are available and may be used to cover additional liabilities and risks such as business interruption, cyber risks, riots, active shooters and possible liability claims from third parties.

So, as you enter your year-end insurance renewal process, here is the key question to discuss with your insurance broker: If one of my buses ends up being used in a ramming attack or other terrorist-type activity, is my business covered and by which policy?

We hope this will never happen in the motorcoach industry, but it’s time to talk with your insurance broker.

Thomas D. DeMatteo is chief legal officer, general counsel and secretary at ABC Companies. He can be reached at TDeMatteo@abc-companies.com.

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