Domestic Terrorism & Insurance: Why GL Coverage May Not Be Enough in Hawaii

Let's talk about something that might keep you up at night as a Hawaii business owner. The risk of domestic terrorism is growing, and your current General Liability coverage might not protect you like you think it does.

Here's the reality: between 2001 and 2021, more than 540 domestic terrorism incidents happened across the U.S. Even more concerning? Federal investigations into domestic terrorism activity have jumped by 357% over the past decade.

So what does this mean for your business in Hawaii?

The Problem with General Liability Coverage

Your GL policy used to cover a lot more than it does today. But insurers are getting nervous about rising claims and nuclear verdicts, so they're pulling back coverage in key areas.

Assault & Battery Exclusions Are Everywhere

Many insurers now completely exclude Assault & Battery (A&B) coverage from GL policies. This creates a huge problem because businesses can be held liable when customers, employees, or bystanders get hurt during violent incidents.

Think about it this way: if someone gets injured at your business during a violent attack, you could be on the hook for damages. Even family members of perpetrators have received multimillion-dollar awards in some cases.

Lenders Want What Insurers Won't Give

Here's where it gets tricky. While insurers are removing A&B coverage, lenders are demanding that GL policies include A&B coverage without sublimits. It's like being caught between a rock and a hard place.

This contradiction makes it incredibly difficult to find adequate coverage that satisfies both your insurance needs and your lender requirements.

How Hawaii's Insurance Framework Works

Hawaii operates under the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA). This gives us some federal backing, but it's not perfect.

Here's what TRIPRA covers in Hawaii:

• Workers compensation policies must provide terrorism coverage
• The federal government backs losses up to $100 billion
• Coverage applies to both domestic and foreign terrorism acts

But there's a catch. The federal government won't pay for losses exceeding $100 billion, and insurers aren't liable for amounts above this threshold either.

Why TRIA Coverage Falls Short

Some businesses try to fill the gap with TRIA endorsements, but this solution has serious limitations.

The Cost Is Skyrocketing

TRIA premiums are getting expensive fast. Some businesses see premiums that equal 100% of their GL premium. That's like paying twice for coverage that might not even kick in when you need it.

Government Certification Is Required

TRIA requires the federal government to certify that an incident is terrorism before coverage applies. This creates delays and uncertainty. Plus, domestic incidents rarely get this certification, leaving you exposed to attacks by U.S. citizens.

Domestic vs. International Terrorism

The legal system treats domestic terrorism as a crime, not terrorism. This means even if someone attacks your business for ideological or political reasons, you might not get the protection you expect from TRIA or traditional GL coverage.

The Hawaii Business Reality

Living in Hawaii creates unique risks for your business. Our isolation means emergency response could be slower during an incident, potentially increasing your liability exposure.

Think about these Hawaii-specific factors:

• High concentration of tourists creates attractive targets
• Island isolation complicates evacuation procedures
• Large gatherings are common (festivals, beaches, events)
• Tourism-dependent economy means incidents have bigger impacts

Your restaurant in Waikiki, your tour company on the Big Island, or your retail shop in Maui all face these heightened risks.

What Private Market Coverage Offers

Private-market terrorism insurance is becoming the go-to solution for smart business owners. Here's why it works better than traditional options:

No Domestic vs. International Distinction

Private policies don't care whether the attacker is American or foreign. Violence is violence, and you're covered either way.

No Government Certification Needed

Your coverage kicks in immediately when an incident happens. No waiting for federal agencies to decide if it counts as terrorism.

Works with Your Existing Coverage

These policies complement your GL coverage instead of replacing it. You keep your existing protection and add another layer of security.

Real-World Scenarios for Hawaii Businesses

Let's get specific about how this affects different types of businesses in Hawaii:

Hotels and Resorts
Your property hosts thousands of guests from around the world. An ideologically motivated attack could result in massive liability claims from injured guests and their families.

Retail Establishments
Shopping centers and stores attract large crowds. If someone targets your business for political or religious reasons, traditional coverage might not respond.

Restaurants and Bars
These venues often become flashpoints for conflicts. Without proper A&B coverage, you could face significant liability if violence erupts on your property.

Tour Companies
You take visitors to iconic locations that could become targets. Your liability extends beyond your immediate property to wherever your tours operate.

Questions You Should Ask Your Agent

When reviewing your coverage, make sure you get clear answers:

• Does my GL policy include A&B coverage?
• Are there terrorism exclusions I should know about?
• Will my coverage respond to domestic terrorism incidents?
• Do I need additional private market coverage?

Don't accept vague answers. Your financial future depends on understanding exactly what protection you have.

Taking Action Today

The threat landscape isn't getting better, and insurance coverage is getting more restrictive. Here's what you should do:

Review Your Current Policies
Look for gaps in coverage, especially around A&B exclusions and terrorism limitations.

Consider Private Market Options
These policies fill gaps that traditional coverage leaves behind.

Work with Experienced Agents
This isn't the time for DIY insurance shopping. You need someone who understands the complexities of terrorism coverage.

Stay Informed
Threats evolve quickly. Your coverage needs to evolve with them.

The Bottom Line

Your General Liability coverage probably isn't enough anymore. The combination of rising threats, increasing exclusions, and limited federal backing creates dangerous gaps in protection.

Hawaii businesses face unique challenges that make comprehensive terrorism coverage even more critical. Don't wait until something happens to discover you're not properly protected.

The good news? Solutions exist. Private market terrorism insurance can fill the gaps that traditional coverage leaves behind. The key is acting before you need it.

Your business, your employees, and your customers deserve better protection than hoping nothing bad happens. Take control of your risk management strategy and make sure you're covered for the threats that actually exist today.