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After tragedy: Rebuild or demolish an establishment?

Casualty|Credit, Political Risk and Terrorism
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By Wendy Peters | August 9, 2019

Following a mass shooting, respect for victims might call for demolishing and rebuilding structures that were relatively undamaged.

The Bataclan Theatre in Paris suffered a 2015 terrorist attack claiming the lives of 130 civilians. After a year of restoration, the theater reopened in November 2016, holding a concert featuring international music stars. Many survivors were invited to attend — a testament to the resilience of the human spirit to thrive and overcome in the face of evil.

But not all venues can reopen or remain standing after tragedy. Subsequent to the elementary school shootings in Sandy Hook, Connecticut, the 28-member school task force voted unanimously to have the school demolished and replaced. The state offered nearly $50 million to raze and rebuild the school.

Likewise, two decades after the Columbine High School massacre, school officials are debating whether to tear down the building and build a new school nearby. If the school goes ahead with this, recent articles predict the cost may well be between $60 million and $70 million.

More recently, owners of the Pulse nightclub in Orlando, Florida, the scene of the 2016 attack that saw 49 people killed, originally planned to demolish the building. The City of Orlando had voted to provide funds to demolish it. Later, the owners raised funds to keep it as a memorial and opened a replacement venue elsewhere.

Structural repair or replacement?

Some active shooter events result in minimal or no physical damage to an insured property but respect for the victims and compassion for their families means that some institutions have evaluated the need for significant renovation at the site of an active shooter incident.

For many industries and particularly educational institutions, a tragic event resulting in multiple injuries or deaths would likely condemn the site.

Planning for the unthinkable

It is, of course, an inconceivable dilemma that school management faces when deciding on malicious risk management options. In some cases local, state or federal funding may become available, but the cost of razing and reconstructing a building averages $20 million, likely requiring large donations to support major work.

The insurance industry has developed policies for this particular risk of teardown and rebuild but they are still in their infancy. Willis Towers Watson developed an insurance program specifically for educational institutions to demolish and rebuild property, even in the absence of direct physical damage, following an active shooter event.

But this is not just an issue for educational institutions. Other soft-occupancy risk profiles, such as entertainment venues and health care organizations, may also need to consider what they should do after suffering a mass shooting at one of their locations.

Contact

Wendy Peters
Global Head of Terrorism within Financial Solutions

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