By Peter L. Higgins
The recognition by insurers that owners will continue to invest in terrorism risk reduction and building safety with the proper incentives is vital to overall risk management of critical infrastructures. The assessment of terrorism vulnerability in key buildings identified as soft targets can be a key component of the rating of risk for a specific structure. In order for owners to benefit from the potential of reduced premiums from direct insurers they must be able to demonstrate a combination of risk mitigation measures and programs to help improve the survivability of the infrastructure or to reduce it’s vulnerability to certain threat scenarios. These need to be exercised on a continuous timetable with extensive documentation, training and reporting.
In order for insurance brokers to accurately represent their buyers mitigation programs and measures to the direct insurers they must have a foundation of knowledge about the buildings physical vulnerabilities. However, even more essential is the understanding of the operational and human attributes of the building that are contributing to the proactive tactics to prevent losses and further exposures to potential terrorism risk. If this step takes place, the insurers can better evaluate these operational and human elements to determine the value and effectiveness of these tactics so that they can be considered for premium reductions. The building itself, two miles from the Whitehouse, has little chance of moving outside the high-risk zone for terrorist events. The only methods for reducing risk exposures are to dramatically impact the operational and human elements of the building to mitigate hazards and increase the survivability of the people and systems that are resident.
More on this series over the next few weeks.