If the federal government officially declares the Boston bombings an act of terrorism, local businesses damaged in the horrific attack may not be able to collect under their current insurance coverage plans.
According to The Wall Street Journal
, Congress passed a law in 2002 that would prevent insurance companies from having to pay damages in the event of a terrorist attack.The law states that the U.S. Treasury Secretary along with the Secretary of State and U.S. Attorney General must declare the event an act of terror for the exemption to take place.
In the case of the Boston bombing, “the Treasury has not yet taken this action of certification,” a Treasury spokesperson told the Journal.
The attack on the Boston Marathon is the first time the law will be tested, and businesses are concerned.
While there is some property damage, most claims are expected to reflect the nine-days of “business-interruption” while the bombing area was blocked off for investigation and clean-up.
Businesses do have the option of paying for “terrorism” protection as part of their insurance policy, but it is believed that most of the affected Boston businesses have not paid for the additional coverage.
The damages must exceed $5 million for insurance companies not to be held responsible for payouts.
Business groups are also looking into what kind of federal aid may be available in the event the bombings are officially declared an act of terror.
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