Terrorism Insurance

I get questioned all the time on the 2002 Terrorism Risk Insurance Act. Here are some key points:

–Federal program with mandatory participation (by insurance companies) that was renewed in 2006. Includes property, liability, workers compensation and many other policies.

–Covers only foreign-led attacks on U.S. property that cause at least $5 million in damages.

–Does not cover domestic terrorism – Oklahoma City, for example.

–Federal government pays for 90% of any losses above a company’s deductible. (85% in 2007)

–Insurer of record responsible for 10% of any losses after a 17.5% deductible. (15% of losses over 20% deductible in 2007)

–Annual losses covered by the program capped at $100 billion.

Expanded coverage is available from specialty insurers. Talk with your insurance adviser.