U.S. Congress misses terrorist exclusion deadline

With the U.S. Congress adjourning for the year, there will be no terrorism risk pool in place as insurers head into the new year, when most commercial policies come up for renewal.

Congress gave up the ghost when the U.S. Senate failed to bring a measure to the floor before the end of the year holiday break. The effects of the move are up for speculation, with predictions that insurers will deny coverage for terrorism risk, a particularly harmful move for the construction/development industry, manufacturers and the energy industry. How this situation will impact lending practices to these industries is also in question. Should commercial clients be able to find coverage, certainly cost would be an issue. The National Association of Insurance Commissioners (NAIC) has said it will approve insurer exclusions for some commercial business in light of Congress’ inability to deal with the issue.