TRIA does not provide sufficient economic protection

Insurers are failing to provide U.S. businesses with adequate terrorist attack protection and, according to a new study, this means a major terrorist attack would result in nationwide economic disruption.The report, “Trends in Terrorism: Threats to the United States and the Future of the Terrorism Risk Insurance Act,” says that terrorism insurance does not cover losses from domestic terrorist groups and that most policies exclude coverage for nuclear, biological and chemical attacks meaning current coverage is completely inadequate. This study conducted by the RAND Center for Terrorist Risk Management Policy, Santa Monica, CA suggests Congress should move to fill these gaps in coverage by expanding the Terrorism Risk Insurance Act and extending it beyond its scheduled Dec. 31, 2005, sunset.Furthermore, the report recommends Congress consider proposals to lower the price of coverage by changing the terms of that federal backstop. The study also suggests the implementation of a national board of governors who would assess the performance of TRIA or a successor program.Enacted after the Sept. 11 terrorist attacks, TRIA requires participating insurers to offer terrorism coverage. TRIA is also a prerequisite for the participation in a government-backed cost-sharing program that helps cover insured losses from future acts of terrorism.