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BOSTON-The arrest last week of 24 suspected terrorists by British authorities isn’t expected to spark a rush on terrorism insurance by US businesses, an industry expert tells GlobeSt.com.

Les Hayward, managing director in the Boston office of insurance brokerage giant Marsh Inc., says a terrorist plot to blow up US-bound airplanes using liquid explosives has not set off a widespread buying spree by firms concerned over becoming a target of terrorists.

“We’ve not seen a knee-jerk reaction either on the market’s part or on the client’s part,” Hayward says. “I think this latest incident shows how good our global anti-terrorism network actually is. If I were an underwriter, I’d take some solace in knowing that we beat them this time.”

Ironically, Boston, which has had no terrorist incidents, leads the nation when it comes to terrorism insurance. According to a study prepared by Marsh, Boston businesses took out more terrorism insurance than their counterparts in either New York or Washington, DC, both targets of a terrorist attack on Sept. 11. The study found that 80% of Marsh’s large and mid-sized clients in Greater Boston took out terrorism coverage in 2005. That was a 10% increase over the prior year and the highest of 10 US cities surveyed by Marsh. In contrast, only 71% of Marsh’s clients in New York and 70% of its Washington clients took out the coverage last year.

Hayward attributed the higher number of businesses buying terrorism coverage in Boston to cheaper local premiums and not a greater risk of terrorist attack. Premiums in Boston run $39 per year for $1 million of coverage compared to $97 in New York and $93 in Washington. Boston’s lower rates reflect the city’s lack of world-renowned structures, he says. “While we have some beautiful buildings, they’re not the World Trade Center, the Sears Tower or global icons,” Hayward notes.

Marsh’s study also found that financial institutions, real estate firms and healthcare facilities were the biggest buyers of terrorism insurance with more than 60% of each sector buying coverage.

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