Rather than a stand-alone terrorism insurance policy, Boston Properties negotiated coverage for that catastrophe in a comprehensive policy for its 28.7-million-sf office portfolio here as well as New York City, Washington, DC and San Francisco. The policy went into effect March 1.
Cost of a terrorism policy was $2.7 million in 2002, says president and chief executive officer Edward H. Linde in the REIT's first-quarter earnings conference call. The cost of terrorism coverage jumped to $3.6 million this year, nearly 22% of the REIT's $16.7-million insurance premium.
On one hand, Linde is pleased to get increased terrorism coverage at a less than proportional jump in premium. "The coverage is there, but we think the cost is too high," Linde laments.
However, domestic insurance carriers have been more reasonable in quotes than their international counterparts, the executive notes. "We're hoping things will get better with the passage of time."
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