Industry Performance after 9/11

Excerpt from Rand Institute for Social Justice report, Compensation for Losses from the 9/11 Terrorist Attacks

Insurers were able to mobilize hundreds of adjusters to evaluate and process claims after 9/11. Many of those we interviewed praised the insurance industry’s quick response to claims and generous interpretation of their policies. Nevertheless, some problems with business-interruption insurance were reported, including significant disputes over business-interruption coverage and complaints about slow payments on business-interruption claims.

More than 85 percent of insurance payments went to businesses. Those who were killed or seriously injured received most of the remainder, with a small percentage going to those with residential property damage. Even in the first two groups, however, insurance payments were often modest compared with losses. Individuals usually carried small amounts of life insurance relative to their annual earnings. Many small businesses had very limited or no business-interruption insurance.

Without the huge insurance payments, the economic disruption caused by the attack on the WTC would have been much greater. Greater demands for assistance would have been placed on government and charities, and a greater portion of the losses likely would have been borne by businesses and their workers.