The aftermath of the terrorist attacks in the U.S. on September 11, 2001 spurred obvious concerns over security, especially for diplomats whose safety is often deemed in jeopardy not only in third-world capitals but also in high-profile targets like New York City.
One insurance provider is now taking direct aim at these concerns while other companies have generally eliminated coverage since late 2001.
Hub International Limited said this week that, costs aside, they would offer an exclusive program to provide property and casualty insurance to embassies, consulates and missions to the United Nations.
In the past this was a target class of business for most standard property and casualty carriers. Since 9/11, however, insurers have either declined to write this class of risk or priced themselves out of the market due to concerns about the terrorism exposure.
However, the retail unit of the company’s New York-based Hub, Kaye Insurance Associates, Inc., crafted the Embassy Program to meet the growing need for this coverage, particularly in New York City.
“Since 9/11, insuring embassies, consulates and UN missions in New York, has become a prohibitive class of business. We believe that we have developed a competitive program that meets their insurance needs,” said James Hutchinson, Senior Vice President of Marketing at Hub International’s New York office.
The firm is currently working with over 20 embassies in New York City and may begin offering coverage in other cities shortly. The coverage is arranged through international insurers and can be structured to include coverage for acts of terrorism.
“In addition,” added Robert Meder, Vice President of Sales at Hub International’s New York office. “our program can arrange coverage against acts of terrorism, which is a key competitive advantage as this risk class cannot currently find such coverage elsewhere.”
Embassies and missions typically own the buildings they occupy, which in New York are usually highly-valued brownstone buildings. In order to be eligible for the program, the property must be valued at a minimum of $2.5 million, which qualifies about 99% of this class of business.
Meder estimates that about a third of embassies and missions in New York City don’t have any insurance coverage in place, due to unavailability or because it’s cost prohibitive, and about 50% are underinsured.