Last week’s attacks across the city of Paris not only shocked the world but reminds us that no area is truly safe from a senseless terrorist attack. The coordinated attacks across the city left 100 people dead and 350 others fighting to survive. Not even a week later over 100 were taken hostage at a hotel in Mali, and it was discovered that the Russian airliner crash last month was the aftermath of a bomb. As events such as these continue to escalate, it is becoming more apparent that the risk facing the global insurance industry has been altered and that many business owners don’t understand the risks they may face in the event of a tragedy.
Your business need to evaluate whether TRIPRA is the right protection against an increasing frequency and severity of political violence and terrorism throughout the world. Is TRIPRA enough? What alternative coverage exists and do I want to pay for it? Religious and political violence, Sabotage, Kidnap and Ransom, Civil war, insurrection and chemical biological or radiological contamination are not covered by TRIPRA. Read more…
It was reported this week that cyber attackers compromised the security of U.S. Department of Energy computer systems over 150 times between 2010 and 2014. The information came from a review of federal records and confirms what many of us have long feared was the case, that the cyber attacks against our energy infrastructure are a reality and could be potentially devastating.
USA Today, with the help of various reporters across the country, obtained access to federal energy records and found that nearly every four days, part of the nation’s power grid is struck by a cyber or physical attack, potentially leaving millions in the dark. The records obtained by USA TODAY through the Freedom of Information Act, confirm the vulnerability of such an attack on our critical energy infrastructure. Read more…
Following TRIPRA’S reauthorization earlier this month, the federal backstop program is set to continue for the next six years. While the extension provides significant relief for buyers of terrorism insurance, it may also lead to a reduction of capacity due to an increase in insurer retention. As a result, stand-alone terrorism policies may be beneficial for businesses that need broader coverage not reliant on government backing. Stand-alone policies are often cost-effective, competitive and available on a worldwide basis. While every business has specific needs when it comes to their terrorism exposure, those that are subject to any of the risk areas below should consider purchasing a stand-alone terrorism policy. Read more…
The U.S. Senate voted 93-4 yesterday in favor to pass the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA) following passage of the same version of the bill (H.R. 26) in the House on Wednesday. Thursday’s vote ended weeks of anxiety for buyers of terrorism insurance caused by the Senate’s failure to reauthorize the bill on December 31st, 2014. Once signed by President Barack Obama, the law extends the federal terrorism reinsurance program for six years.
The bill includes several changes with respect to the reinsurance mechanics of the Act, none of which are expected to impact insurance buyers:
- Program Trigger phased in increase starting on January 1, 2016 by $20 million per year:
- 2015 – $100 million
- 2016 – $120 million
- 2017 – $140 million
- 2018 – $160 million
- 2019 – $180 million
- 2020 – $200 million
TRIA Set to Expire on December 31, 2014 Senate Fails to Reauthorize
The insurance industry and policyholders of TRIA coverage were shocked by the news that the U.S. Senate failed to reauthorize the Terrorism Risk Insurance Act (“TRIA”) before the 113th Session of Congress adjourned for the year at midnight on December 16th.
What does this mean for buyers of insurance?
Since the Senate failed to either extend or reauthorize TRIA, the backstop it automatically provided to insurance Carriers will cease as of December 31, 2014. However, some Carriers have provided buyers with policies that contained special provisions would continue to provide the coverage in the event that TRIA expired and that continues through the end of the policy period. While it’s unclear how the industry will respond during the coming year, certain Carriers have stated that they will continue to provide coverage, even without a formal provision in effect. Read more…
With TRIA set to expire on 12/31/14, the future of terrorism coverage remains among the most highly-anticipated and talked-about issues throughout the insurance industry. As we enter the final quarter of 2014, insurance carriers are facing uncertainty about how coverage will be handled should the act not be reauthorized. With Congress not back in session until mid-November, the clock is ticking for lawmakers to come up with a solution before the end of the year. Based on discussions with insurance professionals and carriers, one of the following three scenarios will likely determine the future of TRIA. Read more…
Amid growing concern over TRIA/TRIPRA’s expiration on 12/31/14 and the government’s long-term commitment to a Federal Backstop program, many Worker’s Compensation carriers have are thinking ahead when it comes to renewals and securing new business.
When Congress extended TRIA in 2007, it also revised the definition of “acts of terrorism” to include domestic terrorism. Domestic Terrorism has three components:
- All acts of terrorism outside the scope of the Act or the Foreign Terrorism Premium with an aggregate workers compensation losses in excess of $50 million.
- Earthquake: The shaking and vibration at the surface of the earth resulting from underground movement along a fault plane or from volcanic activity where aggregate workers compensation losses from the single event are in excess of $50 million.
- Catastrophic Industrial Accident: Any single event resulting in aggregate workers compensation losses in excess of $50 million.