UPDATE: January 13, 2015 5:30 PM
President Obama signed into law today a six-year extension on the Terrorism Risk Insurance Act (known as TRIA).
Congress first created TRIA in 2002 after the Sept. 11, 2001, terror attacks. Most businesses rely on the program's existence to provide economic certainty when they are purchasing terror insurance on the private market.
On December 31, 2014, the Terrorism Risk Insurance Act (known TRIA) will expire. TRIA originally passed in 2002 to make it easier for businesses to purchase and afford insurance coverage against acts of terrorism, which had become next to impossible after the September 11th attacks. Despite Congress previously extending the law twice with little issue, the last session of Congress failed to reach an agreement on the extension of the law prior to the expiration of the congressional session. There is a significant possibility Congress will extend the law in January once the new congressional session starts and that the extension will be made retroactive to December 31, 2014.
TRIA acted basically as a re-insurance safety net for insurers issuing terrorism coverage, insuring companies from catastrophic losses in the event of a declared act of terrorism. By ensuring insurers have protection from catastrophic loss, TRIA gave the insurance industry the confidence to issue policies protecting businesses from terrorism. Now, with the law set to expire, it is unknown how the industry will react and if insurance companies will continue to offer terrorism protection going forward.
In this time of uncertainty, it’s important to know exactly where your policy stands. Many policies that contain terrorism coverage include sunset clauses stating the terrorism coverage lapses when TRIA does. Additionally, some businesses may be under contractual obligations to maintain TRIA coverage. Please contact your account manager at ECBM if you have any questions about what the expiration of TRIA means for you and your business.
To stay up-to-date on the status of this bill, click here