Terrorism – are you covered?

The recent bombing in Bangkok is an unfortunate yet timely reminder that nowhere is safe from the scourge of terrorism.

A mainly Buddhist country with a reputation for being peaceful and very welcoming to visitors, Thailand is a very popular holiday destination for expats living in Asia.

But if you were personally affected by a terrorist attack whilst living overseas, there’s one question you must consider – “Would I be covered?”

As far as health insurance goes, the short answer is “not necessarily”.

If the worst happens, there are a whole host of different factors involved in determining what is a terrorist attack, and what clients may require in the aftermath. Besides the obvious cover for medical treatment, evacuation may be desirable even if there are no physical injuries – staff and their families may simply not want to hang around in an area which suddenly no longer seems safe.

Firstly some context. Although terrorist attacks may be more commonly thought to affect western countries, they are by no means unheard of in Asia.

To give just a few examples – Thailand, the Philippines and China. Each of these countries have experienced well-documented problems with extremist violence in recent times, and it’s unlikely to be a coincidence that we are receiving an increasing volume of queries from clients asking if their policies cover them in terrorist-related incidents.

Although statistically the risk of suffering from terrorist actions may not seem huge, it is nevertheless a matter of perception and the threat does exist. Staff who emigrate to work abroad, particularly those with families have a lot on their mind and naturally worry more about their security in unfamiliar environments. In turn they are more particular about health cover to the point where it may be prudent to offer staff specific coverage for terrorism, so there is significant peace of mind in addressing the terrorist threat in health cover policies.

Also – to be frank – certain types of institutions, such as schools, may feel more at risk. School buses in particular may be considered an easier target. Furthermore, certain nationalities, particularly American citizens, may feel a greater sense of threat. Again, this fear is exacerbated when staff are living abroad in strange lands which has obvious challenges to their sense of security.

However, everyone is at risk, companies large and small, local and expat workers.

What exactly is terrorism? Some insurers, such as Aetna, say it is a matter for the government or relevant jurisdiction to define an event as terrorism or not. Other define possible terrorist events themselves according to their own criteria.

Ping An Health’s definition is: “Terrorism refers to the behavior conducted by any individual or group on his/her or their own or on behalf of any organization, government or parties related to them for reasons of politics, religion, political modality or race with the purpose of exerting influence on the government or putting the public or some of the public in fear, including but not limited to use of force or violence, or threat to use force or violence.“

Cigna’s definition of terrorism is as follows: “Armed actions, armed threats, actions of violence and threats of violence which endangers safety of persons or property, or orders to take the actions as mentioned above, or issuing orders to take actions to destroy or interfere with electronic or communications systems, no matter whether the individuals or groups implementing the actions have any relations with any organizations, governments, states, sovereigns or military authorities. These types of actions, threats and orders have the effect of threatening, forcing and damaging governments or people or deranging the economy.

Clearly there is a lot of room there for interpretation of what may be classed as terrorist action and what would not. Assuming an incident is accepted as being a terrorist incident by an insurer, would you be covered and if so in what way exactly?

It is important to note that, in general, insurers make specific disqualifications for those whose actions may have some connection to terrorism. For example Cigna’s policies state they will not pay out for “terrorism as well as any acts of stopping or preventing terrorist activities which have taken place or are expected to take place,” and also makes similar disclaimers for anyone taking part in riots, civil wars rebellions and similar activities.

In the market there is a lot of variation in terms of what may or may not be covered, and surprisingly little uniformity between insurers.

For some insurers any incident involving terrorism is not covered by standard health insurance, and is usually listed as a standard exclusion in the policy.
So on a basic level one can’t assume that if you need medical treatment as as result of terrorist activity, you will automatically be covered – right from the outset this is something that needs to be clarified specifically.

Elsewhere in the market, some packages do offer cover for those victims physically injured in a terrorist attack on their employer’s premises. The word “terrorism” may not be included in the wording of the coverage agreement, it may simply be the case there is no mention that any injuries caused by terrorist actions are specifically excluded.

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When it comes to the important question of evacuation, only in certain situations can this be covered. Some insurers, such as Cigna, specifically state that evacuation is considered on a case-by-case basis in consultation with the treating medical professional.

Staff may be covered for evacuation if an injury requires treatment which cannot be provided locally, for example, certain types of surgery for more serious injuries – generally, evacuation would be covered regardless if the injury was due to a terrorist attack or not.

However, if an individual was affected by a terrorist attack, but not physically injured, all the insurers we spoke to will not provide cover if a staff member wished to leave the country at short notice for their own safety.

The same is true of someone caught up (but not injured) in a natural or industrial disaster: if someone is not physically injured, being at risk of injury or simply a desire for evacuation does not constitute cover for evacuation under a medical insurance plan.

This is a point of potential friction – just because a staff didn’t suffer any broken bones, doesn’t mean they were not profoundly disturbed by the attack. They may have found it a harrowing experience which leaves them unable to function normally for a significant period.

Furthermore, due to the disruption, a place of business or school may be forced to close, leaving staff unable to continue working even if willing. Staff may also wish to be relocated, fearful that if they remain they may be injured in another attack, which ironically may entitle them to coverage as far as being flown out of the country goes.

When a person is not physically injured, but needs treatment such as counselling, in the aftermath of a terrorist attack, coverage may be provided if psychiatric treatment is available on the benefit schedule of your policy in general.

Although there is increasing demand from clients for their health cover to include treatment caused by terrorism, there is little in the way of specific policies aimed at terrorism in the health insurance market at present, although there are in the general insurance market.

Some insurers do mention war or disease in their policies; with the proviso that the claimant was not actively participating in the war, and is physically injured or sick as a result of the war.

However, evacuation from war zones though is typically not covered as this is not regarded as a health matter if one is not injured. This underlines the complicated nature of the question of terrorism coverage – when is it terrorism and when is it a war? And when can one expect a health policy to cover evacuation and when not?

There are few black and white answers. With increasing awareness of the risk of terrorism, asking your broker to clarify when staff can expect to be covered and when not, is essential. It is not okay to simply assume that if you need medical treatment as a result of the deliberate actions of a third party, that you will be covered.

The lack of specific terrorism health insurance need not be a barrier. For those representing a large group policy, risk can be transferred into other relevant policies to give your staff terrorism-related cover to meet their needs, and this can be done through either the health cover itself, and / or the general insurance covers such as property and liability.

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