The termination of the Terrorism Risk Insurance Program will activate ISO's conditional commercial policy contract language to address terrorism coverage, ISO said.
“ISO recognized the uncertainty created by TRIA's hard ending back in 2004, when the first terrorism insurance act was in place,” said Beth Fitzgerald, president of ISO's insurance programs and analytic services. The expiration of TRIA “creates potential problems in addressing the risk of terrorism for both insurers and policyholders. ISO's terrorism portfolio has always recognized that the potential disappearance of a federal backstop could alter risk midterm and cause a reevaluation of the ability to cover the terrorism exposure. While in 2005 and 2007 Congress acted to extend TRIA before it expired, that was not the case [at the end of 2014].”
The terms of ISO's conditional terrorism endorsements became applicable on January 1, 2015 to policies where they are attached and apply to any losses that occur on or after that date. The conditional endorsements, first introduced in 2004, have been available not only for use with those policies issued earlier in 2014 and that extend beyond the expiration of the Terrorism Risk Insurance Act (“TRIA”) but also for policies with inception dates beginning in 2015, according to the ISO. The array of endorsements provides ISO participating insurers with several options, including:
- an exclusion for losses from acts of terrorism;
- an exclusion for losses from acts involving nuclear, biological, or chemical terrorism; and
- a means to cover terrorism losses not otherwise excluded up to a sublimit.
ISO said that its conditional terrorism endorsements are available for use by participating insurers in all states except Florida and New York. In addition, ISO's manuals contain pricing information applicable to a post-TRIA environment.
“As we have been since 2001, ISO is committed to providing its customers with a full array of tools to help address the terrorism exposure,” added Ms. Fitzgerald. “When the 114th Congress convenes in January, we will monitor developments closely as they relate to a potential retroactive renewal of TRIA.”
Learn more: www.iso.com; www.verisk.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].