Terrorism Risk Insurance Act

The 2002 US federal backstop that keeps commercial terrorism coverage available after private markets withdrew.

Overview

After the 2001 attacks produced insured losses near 40 billion dollars and insurers pulled out, construction lending froze for lack of coverage. The act requires insurers to offer terrorism coverage in commercial lines and, once industry losses from a certified attack cross a large deductible, the federal government pays a large share of the excess up to a program cap, recouping part through policyholder surcharges. Group life was added in 2015. The program has been reauthorized repeatedly with rising industry retentions, keeping a market alive that private capital alone would not write. Cyber terrorism eligibility remains a running debate at each renewal.