The recent bombing at a fertility clinic in Palm Springs, California — identified by local officials as an act of terrorism — has reopened difficult conversations around terrorism insurance. For buyers of business insurance, who are often tasked with selecting whether to pay more (sometimes a lot more) for the “terrorism coverage” offered as an option with their regular insurance policies, this is a critical moment to understand how such events are classified and which businesses may need better protection against such unpredictable and devastating losses.
Who Decides If an Event Is Considered Terrorism?
In the United States, an incident is classified as “terrorism” for insurance purposes under the Terrorism Risk Insurance Act (TRIA), first enacted in 2002. Here’s how the process works: The Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the U.S. Attorney General, must certify an event as an “act of terrorism.”
The act must:
- Be violent or dangerous to human life, property, or infrastructure.
- Occur within the United States (or to certain U.S.-affiliated assets abroad).
- Be intended to coerce civilians or influence government policy.
- Result in at least $5 million in aggregate insured losses.
If any of these elements are missing — or if the event isn’t officially certified — TRIA’s “terrorism insurance” coverage is not triggered, even if the FBI or local law enforcement call it terrorism.
A History of Non-Certification
Since TRIA’s enactment, no incident has ever been certified as a terrorism act under the program (see United States Government Accountability Office: Terrorism Risk Insurance, April 2020) — despite several high-profile events that seemed to meet the definition on the surface.
Consider these examples:
- Boston Marathon Bombing (2013)
Widely recognized as terrorism, but never certified under TRIA.
- San Bernardino Shooting (2015)
Investigated as terrorism by federal authorities, but did not receive certification.
- Orlando Nightclub Shooting (2016)
Despite a terrorist claim of responsibility, it wasn’t certified due to questions around motive and affiliations.
- Las Vegas Shooting (2017)
The deadliest mass shooting in U.S. history — not considered terrorism by federal standards and not eligible for TRIA certification.
These examples highlight how strict and often opaque the TRIA certification process can be — and why businesses can’t assume TRIA insurance would cover just because the word “terrorism” is in the headlines.
What Is TRIA Terrorism Insurance?
TRIA Terrorism insurance is a separate coverage or endorsement that protects businesses from financial loss due to certified acts of “terrorism”. It may include:
- Property damage
- Business interruption
- Extra expenses
- Liability (if included in the policy)
Standard commercial policies typically exclude certified acts of terrorism unless coverage is added through a TRIA-backed endorsement.
Which Businesses Carry Terrorism Insurance?
Businesses with higher public visibility or symbolic value are more likely to purchase terrorism coverage. Common sectors include:
- Financial institutions
- Larger landmark properties
- Hospitals and large healthcare systems
- Government contractors
- Hotels and entertainment venues
- Religious institutions
- Media organizations
- Critical infrastructure and energy
While fertility clinics aren’t traditionally viewed as high-risk, their connection to politically sensitive healthcare services (e.g., IVF, embryo storage) can make them vulnerable in the eyes of ideological attackers — particularly in population centers or politically charged regions.
Businesses with these profiles often do not rely solely on the TRIA’s terrorism coverage, instead spending more for far broader insurance that may include coverage for Crisis Response or Catastrophe Management, which can also address expenses incurred for terrorism-related events that a business may not be responsible for, but have fallout to deal with regardless. A business may also consider Active Assailant coverage, which can potentially provide for the above scenarios as well as overcome possible insured vs insured exclusions.
What Determines the Clinic’s Coverage?
If the Palm Springs fertility clinic carried TRIA-terrorism coverage, its availability will depend on whether the act is officially certified under TRIA.
Without that TRIA certification, the clinic could still submit a claim under its regular commercial insurance coverages, where coverage would be subject to the terms and conditions of its individual policies. While we have no idea what kind of coverages the clinic had in place at that time, it’s conceivable that they would respond as normal.
What Now? Rethinking Risk
The Palm Springs bombing forces the insured community to ask: Are we underestimating which businesses are at risk?
- Rethinking Risk Profiles
The target wasn’t a financial hub or government building — it was a fertility clinic. This shows that ideological violence can strike in emotionally charged or symbolic spaces, even in quiet communities.
- Legal Definitions Matter
Calling it “terrorism” isn’t enough. Only federal certification activates TRIA coverage. The distinction between perception and legal definition is critical in determining which coverage would respond.
- Location, Symbolism, and Public Sentiment
Population centers, controversial services, and perceived political alignment all shape risk exposure — sometimes more than traditional security factors. Does your business have any similar exposures?
- Beyond Broken Glass
Acts of terrorism cause more than physical harm. Reputational damage, patient trauma, operational downtime, and staff retention challenges often follow. How is your business prepared to respond?
- Temporary Help vs. Long-Term Planning
While platforms like EngagePalmSprings.com and agencies like the SBA are stepping in with resources, these are temporary stopgaps. True resilience comes from proactive insurance strategy and risk evaluation.
Final Thought
The Palm Springs bombing underscores a stark truth: Terrorism doesn’t always look like it used to. As ideological lines blur and targets shift, insurance buyers must expand their definition of “at-risk” industries — and understand the coverage differences between terrorism as a label and terrorism as a legally recognized, TRIA-certified event.
If you have questions about terrorism coverage for your business, give us a call. We’re here to help!
About the Author
Larry St. John is a 20+ year veteran of insurance and risk management for the construction and electronic security industries.
He can be reached at LStJohn@eclipseinsurance.com
