LACK OF TERRORISM INSURANCE COVER EXPOSES PORTS TO LIABILITY
American officials believe terrorists, in addition to causing death and destruction, want to cripple trade by making insurance impossible for most port operators to obtain.
“That would surely be the consequence of a terrorist incident in a major port, which would produce devastating consequences to our economy,” Dan Negron, vice president of the TT Club (Americas), told a conference sponsored by the marine facilities division of the California State Lands Commission.
“It is still unresolved as to whether a port operator will be held liable for failing to safeguard against a terrorist act,” Negron said.
“A potential liability for such an event does exist,” he said. But, in today’s insurance market, finding affordable coverage “may be easier said than done.'
“Market analyst reports conclude that reinsurance capacity will diminish significantly in the foreseeable future,” he said.
A major terrorist incident could dry up any reinsurance that might be available, leaving ports wide open to liability. As a result, the government would either have to step in to provide insurance cover, “or shut down trade,” Negron said.
