City adds terrorism insurance coverage
Marion will pay an extra $124 per year
If a terrorist were to use Marion’s airport to fly an airplane into the county courthouse, the city would now be covered by its liability insurance.
For $124 more a year, the city doubled its airport liability insurance coverage and added terrorism coverage Monday.
“I know we think it’s pretty far-fetched to think about that,” said Alex Case of Case & Son Insurance. “But with the way things seem to be going in this country every week, it wouldn’t be that far-fetched to think of someone loading a bomb on an airplane and taking off and crashing into the courthouse. If that were to happen today, the city would have no coverage if they were brought into a lawsuit.”
Case said the city has rejected optional terrorism coverage in the past. It consists of coverage of foreign acts of terror and war coverage for acts of domestic terrorism.
The city could only purchase war coverage if it also accepted foreign terrorism coverage.
“If we had one of our local guys that went off the handle and got in his airplane and used it to fly into a building, the terrorism itself wouldn’t cover it unless you had the war coverage added on,” Case said.
The city council opted for the added terrorism coverage, at an extra $133 per year for foreign terrorism and $33 for war.
While Marion will pay an extra $166 per year in terrorism coverage, the city’s bill is only increasing by $124. The annual premium for airport liability coverage will climb to $1,663, up 8 percent from $1,539.
The difference comes from the city paying less for its base liability premium in a move to a different insurer that also doubles its liability coverage.
The city airport was covered up to $500,000 on its old liability insurance.
“Our underwriter thinks that’s extremely low,” Case said. “They have some airports where they carry $500 million of liability.”
He said airport liability insurance was not a major discussion topic for previous city councils.
Marion’s airport will now carry up to $1 million in coverage. The city also switched from Old Republic to the Ace Property and Casualty Insurance Company. Case said Ace specializes in airport liability insurance and insures about 75 percent of all airports in the country.
Case recommended looking at higher limits in the future, suggesting a $5 million goal, if the premium is not significantly higher.
“It’s one of those things that will probably never happen, but if it did, I think you would want to be a little better prepared,” Case said. “When the lawsuits get filed, everybody’s going to get drug in. And how do you define an act of terrorism, foreign or domestic? I’d say it’s better to be safe than sorry.”
Councilman John Wheeler made moved to approve the revisions.
“I think for $124 a year, it seems like a no-brainer to double it,” he said.
The change will go into effect Dec. 4.
Last modified Nov. 8, 2017