By Fred L. Pillon and Kristin Buff
"Many tenders have created rough guidelines for assesssing risk and determining which investments to pursue."
Prior to September 11, 2001, standard property insurance policies included full coverage for losses produced by terrorist events, under the assumption that the United States was an unlikely target. The radical change in risk calculus brought on by the events of September 11 has caused insurance providers to limit or entirely exclude losses caused by terrorist acts from coverage. With increased risk to their investments, many lenders now require commercial real estate borrowers to obtain terrorism insurance. Limited capacity to insure, increased demand for insurance and exorbitant costs combine to create uncertainty and uninsured risks - characteristics that threaten commercial real estate investments individually and liquidity in the real estate market in general. A recent survey conducted by the Mortgage Bankers Association of America
