The Manager’s Guide to Terrorism, Risk, and Insurance: Essentials for Today’s Business
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About this ebook
As a manager, you’re aware of terrorist acts, are considering the risks, but sense that you need more background. How might terrorism occur? How is it part of risk and threat planning? What insurance strategies might protect your company from financial loss? In a few short chapters, The Manager’s Guide to Terrorism, Risk, and Insurance: Essentials for Today’s Business fills in the blanks for you.
What does it take to weigh the likelihood of a terrorism exposure and protect all the assets of your company? The answer to this question involves understanding the nature of terrorists and their behavior, evaluating the risk of potential damage and business interruption, and exploring ways to use insurance – such as programs covered by the US Terrorism Risk Insurance Act – to protect against severe financial harm.
Authors of this book, David J. Smith and Mark D. Silinsky, give you the benefit of their decades of professional experience in risk management, insurance, physical and cyber security, and anti-terrorism.
Topics covered will help you to better understand:
- Characteristics that could make your company the target of terrorism.
- The most costly terrorist acts that have brought about fatalities and insured property loss. .
- How to anticipate the probability of maximum loss and foreseeable loss from terrorism. .
- The psychological picture of the typical terrorist – the warning signs and pre-attack indicators. .
- Tactics used by terrorists, such as bombings, assassination, and kidnapping. .
- Safety measures to be used by employees in the office and as they travel. .
- Practical steps for loss reduction from a variety of terrorist-related threats. .
- Insurance options to protect against financial loss from destructive terrorist acts, kidnap and ransom, and cyber attack and exposure.
Case studies and discussion questions are provided to speed your understanding of the material. Importantly, since the book has been extensively researched, the authors provide a wealth of resources that you can consult as you dig deeper into this complex topic.
David J. Smith, MSM, CPCU
David J. Smith, MSM, CPCU In 2008, David retired after a 44-year career as an Agent, Senior Underwriter, Product Development Specialist, and Market Intelligence Analyst with the Erie Insurance Group. He is also a retired US Army Military Intelligence Officer who maintained this concurrent career for 22 years. He held Army qualifiers as both Combat Intelligence Officer and Strategic Intelligence Officer. After his retirement, he became the Director of the Risk Management and Insurance Program at Gannon University, where he continues to manage this program. David received a B.A. in Political Science from Gannon College in 1970 and an M.S.M. from the American College in 1995. He received his Chartered Property and Casualty Underwriter (CPCU) designation in 1977 and a graduate diploma from the US Army Command and General Staff College in 1990.
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The Manager’s Guide to Terrorism, Risk, and Insurance - David J. Smith, MSM, CPCU
1
What is Terrorism?
Every day you hear the words terrorism and terrorist. These words have different meanings to different people. Some are confused by the terms. This chapter will broadly cover terrorism, as it affects businesses.
In this chapter, you will learn:
The historical perspective of terrorism.
How different people define terrorism.
The interrelationship between terrorism and crime.
When workplace violence becomes terrorism.
How terrorism affects business and why businesses are targeted.
The influence of politics in driving terrorism.
Mental health issues and personality traits of terrorists.
Some steps you can take to identify terrorists.
If it is possible to build a profile with for the typical
terrorist.
What defensive measures you can take to reduce the probability of a terrorist attack and mitigate an attack, if it occurs.
How to behave in an active-shooter situation.
1.1 Historical Perspective
You may have heard the old adage, One man’s terrorist is another man’s freedom fighter.
Since recorded history, there have been individuals or groups who used violence or the threat of violence to achieve political goals. If you call somebody overzealous
you may, inadvertently, be referring to a group of Jewish militants who, 2,000 years ago, attacked Romans to drive them from what is now Israel. The Romans considered the militants to be terrorists and killed them. One-thousand years later, in the Islamic world, a Muslim sect known as the Assassins
killed their religious rivals for power and influence. From a British perspective, the Patriots’ Sons of Liberty was a terrorist group when its members tarred-and-feathered local tax collectors and dumped valuable tea cargo from a British ship into Boston Harbor.
Fidel Castro became a Third World hero after ousting the Cuban strongman and the organized crime syndicate of the 1950s. At the height of the Cold War, Western leaders and businessmen called him a terrorist. A continent away, beginning in the late 1960s, the Irish Republican Army (IRA), who were Roman Catholics, tried to destabilize Northern Ireland and collapse the will of Protestants to remain part of Britain. The IRA has also used bombings and ambushes against the British establishment in Northern Ireland and England. These are a few of the many examples of the terrorism throughout the ages. But, as a businessman, you face terrorist threats today.
1.2 Characteristics of Terrorism
Regardless of the period, terrorism has maintained several basic characteristics which separate it from other criminal acts or acts of war. First, it is cost effective warfare involving a limited risk for a large potential gain. Today the Islamic State, also referred to as the Islamic State in the Levant (ISIL), or the Islamic State in Syria (ISIS), can order individuals around the world to kill for its cause without deploying its own gunmen. This has been the case in Europe during 2015 and 2016, and the cases will be discussed in this chapter.
A defining trait of terrorism comes from the word itself. Terrorists want to inflict a crippling fear on countries and their societies. A relative handful of persons can keep a large country hostage if that country is not prepared to deal with terrorism. Some countries have adapted to the constant terrorist threat. Israel has lived under a terrorist threat since its creation. In Europe and the US, governments are taking defensive and offensive measures to prevent terrorists from instilling fear in the general population. The challenge is increasing in Europe, in particular, after a succession of mass-murder attacks by ISIL and its supporters in 2015 and 2016.
Further, terrorism is, almost always, used in a derogatory and criminal sense. Rarely do those committing political violence call themselves terrorists. They usually use the terms freedom fighters or Jihadists or other terms that convey a political or religious purpose.
1.3 Terrorist Membership Levels
There is often a basic structure common to many terrorist groups. Terrorist groups generally have different level of members. In this way, terrorist groups resemble political or social organizations. There is the hardcore leadership that gives orders and issues propaganda; an active cadre that makes important political and military decisions; and foot soldiers who carry out the attacks. This has been the standard model of the 19th and 20th centuries. However, the emergence of ISIL has given the lone wolf terrorist a higher profile. This brings an added challenge for law enforcement and security. The terrorist group’s support base of active supporters provides for reconnaissance; funding; building, maintaining, and protecting safe houses; and providing weapons and equipment. Many terrorist groups are organized into cells for security purposes.
1.3.1 The Terrorist Cell
Except for lone wolf operatives, most terrorist operational organization is based on the cell. The modern concept of cell organization was created by Louis Auguste Blanqui, who was a socialist revolutionary during the Napoleonic era (Pilbeam, 2016). Blanqui used several leaders, each responsible for a group of male revolutionaries. The group leaders were the only individuals who had detailed knowledge of the planned insurrection (Chastain, 2005). The group members were not given final directions until the onset of hostilities. This cell structure was developed and used by anarchists and revolutionaries in the 1880s, before the Russian revolution, and continues to be used today.
The modern terrorist cell consists of two to ten individuals including a leader who coordinates with the local leaders of the terrorist group. The smaller number of cell members, the more secure the cell. Cell members are unaware of the membership of the other cells belonging to the same organization. Each terrorist cell may specialize in performing a certain type of operation such as bombings, assassination, kidnapping, extortion, and ambushes. Whenever more than one cell is involved in an operation, the cell members are usually only informed about their particular part of an objective. Actual cell membership is often unknown to the leaders of a terrorist organization.
Because of the small size of a cell, the members are very familiar with each other. They would be very suspicious of any new member or person, making it very difficult to penetrate an active cell. The weak link in this structure is that someone needs to serve as a bridge between the various cells. If the messenger can be identified, he or she may come under surveillance and lead authorities to the locations and leaders of the various cells within a terrorist organization.
1.4 Terrorism in Our Time
Terrorism is part of your life. You see media reports about terrorist attacks on television and radio and read about them in newspapers. As a businessperson, you try to make sense of the terrorist killings to better protect your company, your employees, your customers and clients, and your coworkers. Many of the attacks occur in distant lands, such as the Middle East.
Increasingly, they occur in Western countries where American businesspersons operate and travel. In Europe, cartoonists are gunned down in Paris; concert-goers are murdered in nightclubs, cafes, fast-food restaurants, concert halls, and churches. Transit centers and airports, in Brussels and Istanbul, have become charnel houses. Lesbian, gay, bisexual, and transgender (LGBT) individuals were killed in a nightclub in Florida. Throughout 2016, attacks continued and the Islamic State in Iraq and the Levant (ISIL), also referred to as the Islamic State, has promised to attack more sites in the West (Gehrke, 2016). In Europe, this state of terror has become the new normal.
Terrorism is becoming part of the national fabric in the US. Terrorist-related words may have entered your vocabulary. You have heard the term extremist or violent extremist in reference to terrorist acts. The term soft target may be familiar to you. It is a person or facility that is not well protected. In Brussels, Paris, Nice, and many other cities and towns, soft targets have been slaughtered in 2016.
You may have noticed that terrorism is becoming increasingly lethal, sophisticated, and clever, particularly in the cyber world. Many attacks do not make the news because there are no sensational killings associated with them. Hackers try to disable controls on water control systems and dams; to poison water supplies in the US and Europe; and to collapse bridges and buildings. Some of the terrorism that threatens you and your business comes from determined men and women with assault weapons or homemade bombs. You probably remember the killing in San Bernardino in 2015, and the bombing attack in Brussels the following year. They are recounted very briefly in the sidebar below.
San Bernardino and Brussels - Completely by Surprise
San Bernardino: The 200-year-old small city of San Bernardino is located in the hills of Southern California. It would appear to be an unlikely venue for a terrorist attack. The city bills itself as the first important town in California on Route 66, coming from the east (Weeks, 2015). A famous song invited Americans to get your kicks on Route 66.
Many listened. San Bernardino was the gateway for millions of Americans beginning a new life in California, the Golden State.
More recently, it was home to a married couple with a baby daughter. They were Syed Farook and Tafsheen Malik. Syed Farook was born in the US and turned to Islam with fervor. A county food inspector, he spent much of his free time in a local mosque, memorizing the Quran (Spencer, 2015). He married Tafsheen Malik, a middle-class Pakistani (Valenzuela & Nelson, 2015). Few people outside of the family knew the depth of hatred that this husband and wife held for the US. They were quiet neighbors.
Their pent-up hatred erupted like a volcano on December 2, 2015. Earlier, the killers pledged alliance to ISIL. They came to kill, and fired up to 75 assault-rifle rounds into a crowd of individuals celebrating at a Christmas party at Farook’s place of employment. The husband-and-wife team killed 14 people who were taken completely by surprise. Months earlier some of these people gave Tafsheen a baby shower. After all, they were coworkers and friends.
Brussels: Belgium never had colonies in the Middle East. You may have associated the small, European country with treats, such as chocolate, beer, and waffles, and with Old Master painters. But in March 2016, its main airport became a slaughterhouse. The long arm of ISIL targeted the country because, in its words, Crusader Belgium has not ceased to wage war on Islam
(ISIS claims credit, 2016). Many Belgians did not associate their country with the Crusades and had no idea that they were so hated.
But Belgium had long been a hotbed of simmering radical Islamic extremism. The 2015 massacres in Paris were planned in an area of Brussels sometimes called Little Morocco.
The attack on the satirical Charlie Hebdo magazine was planned there, along with a foiled attack on a high-speed train between Brussels and Amsterdam. According to September 2014 statistics from Belgium’s Ministry of Interior, between 300 and 350 Belgians have gone to fight with ISIL in Iraq and Syria since 2012 (Stevens, 2016).
There may have been as many as 50 ISIL supporters working at the Brussels airport as baggage handlers, cleaners, and food servers. In the aftermath of the attack Belgians organized a march against fear
rally to show extremists that violence will not intimidate Belgians (Brussels march against, 2016). But this march of solidarity was cancelled for security concerns.
1.5 Are There Lessons to Be Learned?
Thinking about the San Bernardino and Brussels killings, you may have wondered if you or one of your employees could come under a terrorist attack. What should you do if you are involved in an attack? Could the attacks have been prevented? Was there any way to have predicted the attack or to have understood the anger of the perpetrators? Were the background investigations deficient? Did coworkers miss some clues? Could anyone have taken precautions they did not take? These issues and many others will be