One Year After Boston Marathon Bombings, Terrorism Risk Coverage Remains Affordable, Available, According To The Insurance Information Institute

FOR IMMEDIATE RELEASE
New York Press Office: (212) 346-5500; media@iii.org

 

NEW YORK, April 10, 2014 — The one-year anniversary of the Boston Marathon bombings, to be marked on Tuesday, April 15, 2014, offers a grim reminder of the continuing threat posed by terrorists, according to the Insurance Information Institute (I.I.I.).

 

“The war on terror is far from over but the federal Terrorism Risk Insurance Act (TRIA) is, by all objective measures, a proven and unqualified success,” stated Dr. Robert Hartwig, president of the I.I.I. and an economist. “TRIA not only succeeded in restoring stability to the country’s vital insurance and reinsurance markets in the years immediately following 9/11, but the program continues to deliver substantive, direct benefits to millions of businesses, workers, consumers and the overall economy—all at essentially no cost to taxpayers.”

 

In its updated white paper, released last month, the I.I.I.’s Terrorism Risk: A Constant Threat – Impacts for Property/Casualty Insurers explores whether terrorism risk can be managed entirely within the private sector. The federal Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) is expiring at year-end 2014. 

 

“Upwards of 60 percent of businesses purchased terrorism coverage nationally in 2012, up from 27 percent in 2003, the first full year of the program. Industries responsible for much of the country’s critical infrastructure such as power and utilities, telecommunications and healthcare, along with financial institutions and local government have take-up rates that approach or exceed 70 percent. Moreover, the take-up rate for workers compensation is effectively 100 percent, meaning that every worker in America is protected against injuries suffered as the result of a terrorist attack,” Dr. Hartwig added.

 

Prior to 9/11, terrorism insurance coverage was included as a part of the package in standard U.S. commercial insurance policies. Today, terrorism coverage is generally offered separately at a price that more adequately reflects the risk. TRIA was enacted by Congress in 2002 to provide a backstop for incurred losses resulting from certain acts of terrorism, and TRIPRA became law in 2007.

 

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