Insurance for "Loss of Attraction"

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Sheila E. Salvatore, Editor | | 126 Business Park Drive | Utica, NY 13502

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In San Ysidro, California, a small white memorial marks the site of a former McDonald’s restaurant where 21 people died and 19 were wounded in a mass shooting in July 1984.

The restaurant itself sustained little damage, and could have resumed food service operations after cleaning and repairs. But it was torn down two months later, “after residents made it clear they did not want to eat where the massacre had taken place,” according to the Los Angeles Times.

Similarly, the original Sandy Hook Elementary School was physically able to house a grade school following the mass shooting there in December 2012, but the state of Connecticut funded its demolition and replacement.We don’t need to ask why.

As another anniversary of the Las Vegas shooting approaches, we can breathe a sigh of relief for the resilience of America’s adult playground. But suppose the gunman had carried out his rampage on the casino floor of the Mandalay Bay? Could anyone ever again enjoy games of chance at that site?

Expanded Scope

If you ask most seasoned real estate or property insurance professionals about insurance for “loss of attraction,” they will probably know of it as a well-established business income coverage. Retail businesses, in particular, have long insured themselves for the losses they might incur if a major attraction in their area, such as an “anchor” department store, suspended operations due to a peril insured under their own property policies.

In recent years, the idea of “loss of attraction” has taken on a broader and more ominous implication, and property owners should be aware that insurance is now available to address abrupt declines in business due to the perception that an area has become dangerous, undesirable, or inaccessible.

In the wake of terrorist attacks and mass shootings, loss of attraction coverage, with or without property damage, has become a common component of property insurance in continental Europe and the United Kingdom.

Insurance for “Loss of Attraction”

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