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The program is set to expire December 31, 2005 unless Congress extends it.
Now insurance companies must notify their policyholders that terrorism coverage is in place on the policy, and is available on new policies, if they elect to pay the premium. Policyholders may reject the coverage on all lines except Workers Compensation.
So how does TRIA affect the typical commercial policyholder? If they carry Workers Comp coverage, policyholders must retain the coverage and pay the premium. With the other commercial coverages, they must decide whether to accept or reject the coverage.
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The ultimate question is, “Do I really need this coverage?” While models for loss scenarios are new, most suggest major metropolitan areas are by far the most likely targets. And while few properties are high profile (the Sears Tower, for instance), properties in the immediate area would likely suffer collateral damage. In addition, certain lines of business have greater loss potential. For example, with Workers Comp insurance, the mobile nature of workers and susceptibility to chemical and biological agents creates more loss potential.
Other types of coverages, like General Liability, Umbrella, and Auto Liability, are less likely to be affected.
The best thing to do is talk to your independent
insurance agent to determine if terrorism coverage is right for your
business.
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