Zero Dark Policy

At the 85th Academy Awards ceremony later this month, Zero Dark Thirty will be a front-runner to take home a handful of golden statues. The movie, which chronicles the near-decade-long hunt for Osama bin Laden, marks the end of an era of global terrorism — a transition that is also occurring in the terrorism insurance market.

While the threat from Al Qaeda and affiliated groups remains paramount, the wider issue of global unrest has led to a redefinition of what exactly terrorism is, a debate that is altering the coverage landscape, according to a recent report from reinsurance broker Guy Carpenter.

“Tensions Building: The Changing Nature of Terrorism and Risk Coverage,” says many companies that believe they are looking for terrorism coverage are really in the market for political risk insurance. This phenomenon is increasingly blurring lines between the two.

“The scale and damage caused by recent global unrest has prompted a reassessment among risk carriers of how terrorism-related risks and coverages are defined,” states the report. “The definition of an ‘act of terrorism’ can be open to different interpretations.”

The advice for risk managers is clear: make sure the specifics of your policy are understood, and realize that interpretations may vary by location.