According to the Federal Emergency Management Agency (FEMA), "terrorism is the use of force or violence against persons or property in violation of the criminal laws of the United States for purposes of intimidation, coercion, or ransom." The Federal Bureau of Investigation (FBI) categorizes terrorism into two classes: domestic terrorism and international terrorism.

Domestic terrorists' activities are directed at our government or population without the direction of foreigners, and international terrorists' activities can be foreign-based, foreign-directed, or transnational. Thus, terrorism in the United States can be classed as either domestic or international terrorism.

Most terrorist incidents in the United States have been bombing attacks, involving explosive devices, tear gas, and fire bombs. Increasingly, biological and chemical weapons have been used as terrorist weapons around the world. While no biological or chemical terrorist incidents have occurred in the United States, there remains a concern that such weapons could be used by terrorists. The effects of domestic terrorism can vary significantly from loss of life, injuries, property damage, and business interruption of utilities, transportation, communications, and other business activity.

Aims of Terrorists

Physical injury or murder of persons, including kidnapping

Physical harm to or destruction of property, including business interruption

Physical harm to or destruction of symbolic structures or property

Slander or misinformation about persons or business dealings via press, mail, email, or telephone, including extortion

Misinformation about corporations, corporate trademarks, slogans, or products

Product tampering

The major method of attempting to reduce terrorism has been increased security at airports, other public facilities and meeting places, and corporate facilities. The government also negotiates with other countries to limit foreign support for terrorism. Increasingly, terrorism is a risk that corporate and public risk managers should study and attempt to mitigate.

Mitigation Efforts by Risk Managers

Terrorists typically targets public places where they can avoid detection before or after an attack such as airports, large cities, major international events, resorts, major corporate headquarters, and landmarks. Diligence at these types of locales, and training of personnel about terrorist weaponry, recognition of suspicious behavior, and the vulnerabilities and safety features of their buildings and facilities are important potential factors in mitigating a terrorist incident.

Anti-Terrorist Risk Management Tasks

Work closely with local, state, and federal governmental authorities, with your legal counsel, and with security professionals in all anti-terrorist planning activities

Encourage sensitivity to controversies within your organization and among your corporate neighbors and peers, especially those that create public or international political, religious, or ethnic debate

Control physical and electronic access to your organization, including the control of access to certain physical aspects of your organization

Promote disaster recovery planning and systems protection

Encourage proactive public relations

Purchase insurance products that transfer appropriate risks

Insurance and terrorism

Prior to 9/11/2001, for insurance purposes, terrorism was rarely defined as "war." Property insurance usually excludes many perils including war, rebellion, revolution, civil war, insurrection, invasion, usurped power, enemy attack, and nuclear-related loss. Nevertheless, oftentimes, first party property damage may be covered if the loss is resultant from an act of terrorism.

After 9/11, everything changed.  Terrorism was either eliminated was coverage or strictly delimited.  This gave rise to the need for a governmental mechanism underlying this coverage--the Terrorism Risk Insurance Act (TRIA).

Terrorism in the workplace can cause catastrophic workers' compensation claims. In addition to immediate death and physical injury claims, claims involving ongoing psychological and emotional issues including, but not limited to, post-traumatic counseling may result from terrorist acts in the workplace.

Risk management and insurance planning require examination of the locales and indigenous legal, political, and regulatory conditions of all of an organization's workforce. For example, if workers labor and reside outside the U.S., workers' compensation and employer's liability coverage usually respond differently from workers' compensation within the U.S.'s various jurisdictions.

This examination also involves the potential for kidnapping of employees or their associates and family for ransom. Kidnap and ransom insurance, product recall, brand protection, key person life insurance, extortion insurance, and other specialty products can help organizations prepare for these contingencies, both from the points of view of preparation and planning with security professionals and of business continuation.