Terrorism Insurance: What Risk And Insurance Professionals Must Know

The insurance industry received a terrible wake-up call on September 11, 2001, that changed everything. Among the many consequences was the realization that terrorists could inflict a previously unfathomable scale of injury and damage, which caused insurers to rethink their approach to providing commercial lines insurance. First they began to draft and employ very broad terrorism exclusions and then came the Terrorism Risk Insurance Act (TRIA), which was followed by new exclusions and coverage approaches. IRMI research analysts closely followed all these developments, publishing detailed analyses and commentaries along the way on our Web site and in our reference manuals. The rapid evolution of the industry’s approach to terrorism insurance seems to have slowed to some extent, but one thing is certain: it will never go back to the way it was. Whether you are the risk manager of a Fortune 1000 company, an independent agent writing Main Street accounts in the American heartland, or a commercial lines underwriter, you need to understand the new approaches to insuring (or excluding) terrorism. By consolidating, synthesizing, and building upon all the analysis IRMI has conducted and published over the past 2 years, this book will assure you have that knowledge. It provides a concise but thorough explanation of the state of terrorism insurance in the United States today. Here are some of the things you will learn. The evolution of the industry’s approach to insuring terrorism risk from September 11, 2001, until September 1, 2003 The rights of commercial insurance buyers under TRIA (and the responsibilities of insurers) What is and is not covered when “TRIA coverage” is purchased How the many different standard endorsements for general liability, commercial auto, and commercial property insurance apply Some general guidelines to help decide whether to purchase coverage for terrorism exposures What is covered under special stand-alone terrorism policies Who is writing stand-alone terrorism insurance Important differences in the predominant stand-alone terrorism insurers’ forms Some of the ways TRIA may impact captive insurers Thoughts on how to use a captive to insure terrorism risk Who Needs this Book? This book will benefit any business or risk professional responsible for selling, advising on, or underwriting commercial lines insurance. In particular, risk and insurance professionals who do not have access to the IRMI Commercial Property Insurance and Commercial Liability Insurance reference manuals or those seeking a handy compendium of information reviewing terrorism issues for all lines of insurance will benefit from this book. Insurance agents and brokers Risk managers and insurance buyers Commercial lines insurance underwriters Risk management consultants Bankers and others working with commercial real estate transactions Insurance coverage lawyers Written and Edited by the IRMI Editorial Team This book contains contributions from the entire IRMI editorial team and a guest author, Kathryn A. Westover. Ms. Westover, author of Captives and the Management of Risk contributed Chapter 10. Linda G. Robinson, CPCU, ARM, served as the lead editor and wrote much of the book. For the past 24 years, Ms. Robinson has worked with commercial property insurance, first with an international insurance brokerage firm and then as an IRMI research analyst. She is the principal author of Commercial Property Insurance, a 2,500-page IRMI reference covering all aspects of commercial property, crime, inland marine, and equipment breakdown insurance.