The Terrorism Risk Insurance Act (TRIA) provides a layer of financial protection against terrorism-related losses, but its limitations can be overlooked.
Following the 9/11 attacks, insurers introduced broad terrorism exclusions, prompting the U.S. government to establish the Terrorism Risk Insurance Act (TRIA) in 2002. This created a temporary federal backstop requiring insurers to offer limited terrorism coverage for certified events.
Peter Bransden: In the aftermath of unprecedented losses from 9/11, property and casualty insurers imposed broad exclusions against future terrorist attacks. To avoid a prolonged crisis of coverage, in 2002 the U.S. government implemented the Terrorism Risk Insurance Act (TRIA), creating a temporary Terrorism Risk Insurance Program (TRIP).
Under this law, insurers are required to offer limited protection against acts of terrorism that are certified as such by the U.S. Secretary of State and Attorney General. Despite several attacks within the U.S. since the creation of TRIA, none have achieved certified status.
Organizations should therefore be aware that when accepting TRIA-only coverage embedded within a property or casualty policy, they still remain exposed to potentially catastrophic loss. To address this vulnerability, a terrorism insurance policy can be purchased in the specialty marketplace. This standalone coverage responds regardless of governmental certification and can be tailored to represent an organization’s true exposure to the peril.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
With 15 years experience in the specialty re(insurance) industry, Pete has spent time as an underwriter, broker and risk manager. Pete now leads Willis Crisis Management in North America working to protect clients from terrorism, political violence, active assailant, social unrest, kidnap for ransom and extortion risks.
