Exclusively from Foa & Son
The federal terrorism insurance backstop which was originally enacted shortly after 9/11 expired on January 1, 2015; as we went to press it has yet to be renewed by Congress.
Terrorism insurance provides coverage for potential losses to property or people due to acts of terrorism. Loss from terrorist acts has been excluded from most policies since right after 9/11; TRIA was the federal program that allowed underwriters to offer such coverage. Without TRIA such coverage will only be available for higher cost, if at all.
Workers compensation is a different problem, since underwriters can’t exclude claims arising from terrorism from a WC policy. A workers compensation insurance policy underwriter has only two options when it comes to addressing a terrorism exposure, either increase the price for mandatory terrorism coverage, or decline to write the policy altogether. If this last option means an employer must go into their state’s assigned risk plan or residual market, that’s a guaranteed price increase as well as a massive headache and a guarantee of poor service.
As of this writing there appears to be no widespread insurance market impact; the insurance industry is standing pat and banking on fast action from Congress to pass an extension of TRIA. If TRIA is not renewed in the first quarter things could get interesting; stay tuned.