The Palm Springs community continues to uncover the fallout from last Saturday’s car bombing, including a new frustration for impacted business owners: denied insurance claims. While the bombing has officially been labeled a terrorist act, that classification has left small businesses without coverage unless they carried a rarely opted-for terrorism policy.
This week on The Roggin Report, Fred Roggin welcomed legal analyst Walter Clark to explain what’s happening behind the insurance denials.
Clark explained that terrorism coverage is not automatically included in standard business insurance policies. Following 9/11, Congress passed the Terrorism Risk Insurance Act (TRIA), which requires insurance companies to offer terrorism coverage to commercial policyholders. But many businesses opt out, either unaware or hoping to save on premiums.
“The insurance industry made $170 billion in profit last year,” said Clark. “But they only pay claims based on the actual contract. We have to see what the written policy says.”
Clark noted that policies often exclude intentional acts like terrorism, unless the business owner specifically purchased terrorism coverage through what’s known as a BOP policy. He added that there could be a slim chance for coverage if insurers failed to properly offer the terrorism endorsement.
“There’s always hope,” Clark said. “If the policyholder was never given the option, there could be a valid claim. But that has to be reviewed case by case.”
Roggin pointed out that insurance companies paid out billions after 9/11, so why not now? Clark responded that large-scale acts that cause over $200 million in losses typically trigger TRIA protections. Smaller-scale incidents, like this one in Palm Springs, may not meet that federal threshold.
“If the bomber had detonated the device accidentally while driving by, it might be a different legal situation,” Clark said. “But in this case, it appears to have been intentional. That makes coverage much less likely.”
Business owners affected by the bombing are being encouraged to have their policies reviewed by legal experts to determine if any coverage options remain.
credit: NBC Palm Springs
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By: Fred Roggin
May 22, 2025
