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BIG PICTURE: Clock Running on Terrorism Insurance for Developers

ORLANDO-As major insurance carriers warn policyholders their coverage will be cancelled, curtailed or charged a hefty premium by Dec. 31, Congress remains stalled in creating a backup real estate insurance financing plan. About $26 billion in fourth-quarter real estate financing around the country is at stake.

By Alex Finkelstein | Updated on November 19, 2001

ORLANDO-The danger of not being able to finance new projects after Dec. 31 is posing a serious threat to commercial real estate developers. Major insurance carriers are warning policyholders their coverage against acts of terrorism will be cancelled, curtailed or charged a new sky-high premium.

“In the system as we know it now, if you can’t get terrorism insurance, you can’t build buildings,” Raymond T. O’Keefe, co-chair of the Real Estate Board of New York’s Economic Development Committee, tells GlobeSt.com Northeast Bureau Chief Glen Thompson.

“People are saying this could bring construction to a halt,” says O’Keefe. “This could be a tremendous block in real estate activity.” O’Keefe is also a regional managing director at Grubb & Ellis Co.

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