The 2001 terrorist attacks on our nation impacted the insurance community because many policies were silent on damage caused by the attacks. Created in 2002, the Terrorism Insurance Act (TRIA) provides a reinsurance backstop in the event of large-scale terrorist attacks. The act required insurance carriers to either automatically include or provide a choice to the insured to purchase terrorism coverage within all commercial property and casualty insurance policies, including workers compensation policies. If an insurance carrier does not automatically include the coverage, they must provide an option to accept or reject terrorism for a specific premium. TRIA has been extended and currently runs through December 31, 2027.
Insurance carriers who do not automatically include the coverage, must ask the insured annually if TRIA is either accepted or rejected. You may also notice policies that cover earthquake losses are required to provide the option for terrorism coverage, as well.
Although a terrorist attack could affect anyone, anywhere, evaluate your association’s risks. If the community is a tall, high-rise building or located in a high-population area, the risk could be greater.
In 2003 FEMA (Federal Emergency Management Agency) published a reference manual to mitigate potential terrorist attacks against buildings. This large document contains detailed information on how to spot security vulnerabilities and more. This thorough FEMA manual may be a helpful resource for your community. Access FEMA’s Risk Management Reference Manual here.
Why is a Reserve Study Important?
