Just in case Penn is ever the target of a terrorist attack, Uncle Sam has the financial part covered.
The Department of the Treasury issued a statement last month that said the federal government would pay the most expensive insurance costs if terrorists ever launch a large-scale attack.
And while experts say it is unlikely that Penn will ever need to avail itself of this federal program, officials in the Office of Risk Management and Insurance say the University is covered anyway.
Penn maintains various lines of insurance coverage on all its property to insure against calamities, including acts of terrorism, Erika Gross, associate director of the Office of Risk Management and Insurance, said.
The primary examples of what Penn's insurance covers are property, general liability and fine arts holdings, Gross said.
According to last month's statement from the federal government, Congress can be required to pay for the majority of damages from a certified terrorist attack, which would be a large-scale attack like the one on the World Trade Center in 2001.
Non-certified terrorist attacks are typically the products of actions by radical domestic organizations, Gross said, while certified attacks are on a much larger scale and involve multi-million dollar losses.
The announcement also said that the percentage of companies with terrorism insurance is now at 58 percent, up from 27 percent in 2003.
Under the current plan, which was enacted by Congress in 2002 and later extended through next year, insurance companies would cover up to $25 billion in damages from a certified attack, but the federal government would step in and cover the rest of the costs, up to $100 billion.
But it is unlikely that Penn will ever be the target of an attack large enough to require the government to step in and help cover costs, industry representatives say.
Penn's policies prevent Gross from revealing any specific information about which carriers the University uses or the values at which University buildings are insured, she said.
Acts of terrorism are classified by the government as either certified or non-certified, she said.
After Sept. 11, the cost of terrorism insurance rose dramatically, said James Valverde, a representative from the Insurance Information Institute, an industry think tank based in New York.
"In the wake of 9/11, there was an immediate need for the federal government to think about how it might stabilize the availability and affordability of terrorist risk insurance," Valverde said.
Many insurers excluded terrorism insurance from their policies, he said, which caused the government to form the Terrorism Risk Insurance Act in 2002. President Bush signed a bill late last year that extends TRIA through the end of 2007.
After that, it may no longer be needed, Gross said.
The cost of insuring against terrorist attacks, which is included in property insurance policies, has decreased significantly since the wake of 9/11, she said.
And industry officials say that Penn and other universities are smart to take out policies against these types of attacks.
Colleges and universities are "places where large numbers of people gather," said Dennis Kelly, a spokesman for the American Insurance Association, another industry think tank.
For that reason and because many of them have research labs and hospital facilities, he said, they "would be attractive targets to terrorists."
Even Penn-affiliated property on the University's campus that is not owned by Penn is required by the University to be covered by some type of insurance.
Hillel and the privately owned fraternity houses on Locust Walk, she said, are "required to maintain levels of insurance."
