While extending TRIA is crucial to get the marketplace stabilized for the long haul, there may be a new risk on the horizon. By purchasing Terrorism Risk Insurance, REIT’s and other property owners may think they are off the hook when it comes to hedging this specific type of risk. Nothing could be farther from the truth. Without clear evidence that landlords are preparing their tenants and staff for potential loss events of any magnitude, they face one the greatest of Operational Risks. Legal Liability and loss of reputation. There is much more to the mosaic of risk management than just purchasing an insurance policy. Let’s just hope that those entities involved are encouraging their respective staff and tenants to become more proactive, preventive and relevant when it comes to thir critical infrastructures Operational Risk Management.
While extending TRIA is crucial to get the marketplace stabilized for the long haul, there may be a new risk on the horizon. By purchasing Terrorism Risk Insurance, REIT’s and other property owners may think they are off the hook when it comes to hedging this specific type of risk. Nothing could be farther from the truth. Without clear evidence that landlords are preparing their tenants and staff for potential loss events of any magnitude, they face one the greatest of Operational Risks. Legal Liability and loss of reputation. There is much more to the mosaic of risk management than just purchasing an insurance policy. Let’s just hope that those entities involved are encouraging their respective staff and tenants to become more proactive, preventive and relevant when it comes to thir critical infrastructures Operational Risk Management.