Federal Terrorism Risk Insurance Act
The Federal Terrorism Risk Insurance Act appeared on Workers Comp policies since 2003. .Since the September 11 terrorist attacks, there has been a lot of concern over whether the insurance industry would continue to provide insurance for losses due to terrorism. So in 2002, congress enacted the Terrorism Risk Insurance Act.
It was intended to limit the liability insurance carriers are exposed to in the event of a major terrorist attack. The act provides a federal backstop for acts of terrorism resulting in at least $5 million in losses and certified by the US Treasury secretary as an insured loss. The act primarily covers property and casualty insurance other than worker’s compensation and requires the federal government to pay 90% of the cost of an attack by foreign terrorists after losses are greater than $10 billion, up to a total of $100 billion.
The act was reauthorized in 2007, extending the plan until December 31, 2014. The update also requires that losses exceed $100 million. The definition of “act of terrorism” was also revised, removing the requirement that the act of terrorism be committed by an individual acting of behalf of any foreign person or foreign interest.