Terrorism Risk Insurance: What You Need to Know

The Terrorism Risk Insurance Act (TRIA) of 2002 helps make sure that coverage is still available when the worst happens, so that jobs stay protected and communities can recover. It has supported businesses, workers, and local economies for over 20 years with almost no cost to taxpayers.

TRIA is set to expire in 2027. If it is not renewed:

Terrorism insurance could be harder to find or not available, especially for businesses starting new projects
Employers may face higher costs, including for required workers’ comp coverage
Construction and local development could slow down, putting jobs and investments at risk
Fewer insurers may offer coverage, reducing choice and raising prices
Any delay in renewing the program could cause serious market confusion and disruption, as it did in 2014

To avoid market disruption, protect taxpayers, and allow families, workers, and businesses to plan long-term, Securing Our Future urges the immediate reauthorization of TRIA with its current structure and a long-term extension before the 2027 deadline.

What is TRIA?

TRIA is a partnership between the federal government and insurance companies. Here’s how it works:

– Insurance companies agree to offer terrorism coverage
– If an attack causes massive damage, the government helps insurers keep paying claims
– Most of the time, insurers can cover the full cost on their own
– If federal funds are used, insurers must pay them back later

This helps keep insurance available even when the risks are too big for the private market alone.

Why do we need it?

After the 9/11 attacks, the scale of losses forced many insurers to remove terrorism coverage from commercial policies to stay financially stable. Without that coverage, it became harder for businesses to rebuild, start new projects, or qualify for loans. It also put upward pressure on workers’ compensation insurance, which must cover injuries from acts of terrorism under state law.

TRIA helped fix that. It brought coverage back into the market and helped employers, workers, and investors have the confidence to move forward.

How does it protect workers and taxpayers?

TRIA is especially important for workers’ compensation. If employees are injured in a terrorist attack, their medical care and support can last for years. TRIA helps make sure insurance companies can keep paying those benefits.

It also protects taxpayers. Insurers cover nearly all terrorism-related losses. The federal government only steps in when losses reach very high levels, and even then, insurers are required to pay the government back.

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