Does TRIA matter for small businesses

In January the Terrorism Risk Insurance Program Reauthorization Act of 2015 was signed into law.  This law extended the previous Terrorism Risk Insurance Act (TRIA) through 2020.  Although this caused a sigh of relief for many insurance carriers, many small businesses are still confused by TRIA.

TRIA created a federal “backstop” for insurance claims related to terrorism events in the USA.  In order to be triggered loss must be over $5,000,000 in property & casualty losses and the cause of loss must be a certified terrorism event.  The federal government is responsible for certifying an even as a terrorist event.  Under TRIA, insurers must make terrorism insurance coverage available to their policyholders when offering to underwrite an accompanying line of business.  This is why you annually may have to sign a Notice of TRIA form.

Coverage for terrorism loss should be strongly considered for business located in larger cities especially Washington D.C. and New York and who are located in or around national monuments, federal buildings, and major transportation venues (airports and coastal ports) which would have a higher likelihood of being attacked.  Even if you decline terrorism coverage, it is good that this reinsurance continues to be in place as it will provide a back up to the economic system which small businesses are a part of and depend upon.