Terrorism insurance – who has it?
Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities. It’s considered to be a difficult product for insurance companies, as the odds of terrorist attacks are very difficult to predict and the potential liability enormous.
A commercial terrorism policy covers damaged or destroyed property including buildings, equipment, furnishings and inventory. It may also cover losses associated with the interruption of your business. Terrorism insurance may also cover liability claims against your business associated with a terrorist attack.
War is also a form of terrorism and to cover that there’s War risk insurance. War risk insurance is a type of insurance which covers damage due to acts of war, including invasion, insurrection, rebellion and hijacking. Some policies also cover damage due to weapons of mass destruction. It’s most commonly used in the shipping and aviation industries.
In the United States (US) The Terrorism Risk Insurance Act is a United States federal law signed into law by President George W. Bush. The Act created a federal “backstop” for insurance claims related to acts of terrorism. The Act “provides for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism.
The Act was originally set to expire December 31, 2005, was extended for two years in December 2005, and was extended again on December 26, 2007. The Terrorism Risk Insurance Program Reauthorization Act expired on December 31, 2014.
On January 7, 2015 the House of Representatives voted to approve the Terrorism Risk Insurance Program Reauthorization Act of 2015, extending the TRIA through the year 2020. The Senate approved the extension. On January 12, 2015, President Barack Obama signed the extension into law.
The scope of the 9/11 attacks and the resulting $40 billion estimated insured loss changed perceptions dramatically. It was the worst terrorist attack on record for both property and fatalities and the worst international attack on American soil since the Japanese surprise attack on Pearl Harbor. As nearly 3 000 people lost their lives in New York City, Washington, D.C., and Stonycreek Township near Shanksville, Pennsylvania.