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By DAN REYNOLDS, senior editor, Risk & Insurance®

Targeting institutions of mercy or care constitutes an act of terror that is almost inconceivable, yet someone has not just thought of it but planned to carry it out in Pennsylvania. Emerson Begolly, otherwise known as Asadullah Alshishani, awaits trial on jihadist plans to blow up small medical centers, including day care facilities.

Enter Hiscox. The Bermuda-based Lloyd's syndicate has introduced a hospital terrorism liability product with a $50 million-per-event limit. "This all came about by viewing what we see as a gap in the market," said Ian Thompson, the Bermuda-based senior vice president, healthcare for Hiscox.

Terrorism liability products exist, but Thompson said the unique exposures inherent in hospitals and healthcare centers, the vulnerable populations they serve, and the institutional responsibilities under "duty of care" provisions laid out by the Joint Commission and Medicare, make hospitals and healthcare centers a specific liability.

In the case of a terrorist attack, the lawsuits that spring up against institutions may cast a wide net in an effort to determine and assign liability to professionals who arguably are responsible for public safety. Just witness the numerous lawsuits directed at the Port Authority of New York in the wake of the attacks that took down the World Trade Center towers.

"The Port Authority of New York was sued multiple times for not recognizing and not spotting two planes that were going into the towers," Thompson said.

"And that is a really, really tough thing to pin on someone because how could they really have foreseen that, and if they could what would they have done about it?" Thompson said.

"But the point of it is they were still sued," he said.

The Alshishani case is just one example identified by Hiscox where the plans of a terrorist have included the most vulnerable populations, housed in hospitals and other healthcare centers.

In 2004, for example, the FBI and the Department of Homeland Security issued a nationwide terrorism bulletin warning of attempted attacks by al-Qaida on Department of Veterans Affairs hospitals throughout the United States.

In 2008, the wife of a Sept. 11, plotter was arrested with a list of hospital and medical research targets. She is serving an 86-year sentence.

Thompson said since the events of Sept. 11, the dismantling of al-Qaida's command and control structure, the death of Osama bin Laden and the capture of other high-ranking al-Qaida leaders, the impression of the average citizen might be that the world is a safer place. That's not necessarily true and shouldn't lead to complacency, he said.

"If anything there has been a loosening of the belt," Thompson said of the attitudes of healthcare risk managers. He advised healthcare risk managers to list the threat to medical institutions a little higher on their agendas.

The Hiscox product includes the services of risk management specialists who can help hospitals and healthcare centers conduct security reviews, and analyze or study an institution's risk to sabotage and terror attacks. It also has no exclusions for claims alleging mental injury, anguish or shock.

December 20, 2011

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