terrorism insurance

Discussion in 'Trading' started by vladiator, Nov 4, 2002.

  1. I might be going out on a limb here, but I've been thinking about this issue lately and I'm wondering, shouldn't a cleverly constructed position in derivatives do the trick?
    I'm thinking smth like a long term straddle maybe...
    Any thoughts?
  2. If people do a lot of hard work to build buildings and terrorists destroy them, along with other innocent lives, there is no way to hedge against that sort of loss financially.

    Buildings will need to be rebuilt, consuming man-hours. Lives will forever be lost than cannot be replaced.

    You can't hedge against that.
  3. Dude, do you understand the concept of terrorism insurance? Or even plain insurance for that matter???
    You have a house, it burns down. There's no way you can replace the original/negative of that picture you posted on the web and it sure has a lot of sentimental value to you. But you buy insurance anyway right? It's not supposed to make sure you are "made whole" again.
    But if an act of terror can potentially hit some company and it's stakeholders can at least partially take out some of the risk, that may be of help to those potentially affected.
  4. Insurance on terrorism is already offered. In fact, many businesses in DC had to eliminate it because of the high principles.

    For a large business with a lot of exposure, I think it makes sense. However, how many smaller sized businesses are going to be exposed to terrorism on a statistical basis? Probably not that many, especially given the size of this country.
  5. Hmmm, weird. What's your source? I'd like to took into it a bit more.