XL Group's US Crisis Management business has introduced a new standalone terrorism insurance policy to help US businesses address potential gaps in coverage provided by the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA).
According to Ben Tucker, head of XL Group’s US War, Terrorism and Political Violence underwriting team, "With TRIPRA reauthorization still in question or uncertainty around what the scope of protection in the future might look like if it’s extended, many businesses do not want to leave their terrorism insurance protection in question."
Under the current TRIPRA legislation, an act must be ‘certified’ by the US Treasury Secretary, Secretary of State or Attorney General as an act of terrorism for businesses to collect federal terrorism coverage.
Also, losses less than $5 million are not protected under the federal program. As of April 2014, for instance, Boston Marathon bombing claims for property and business interruption amounted to approximately $1.9 million, according to a Massachusetts’s state report, not near TRIPRA’s established threshold.
"While $1.9 million in losses might not have been enough to certify the Boston Marathon bombings as an act of terrorism, it certainly was enough to raise concerns among many businesses," explained Mr. Tucker. "A $100,000 uninsured loss can be too much for many businesses to sustain without the right insurance protection."
With policy limits of up to $100 million available, XL Group’s insurance companies new Terrorism insurance policy:
Includes a broad definition of terrorism including coverage for political, religious and ideological purposes;
Extends to cover an act of sabotage;
Provides insurance coverage often limited or excluded by other terrorism markets for business interruption, extra expense, loss of rental income, service interruption and radiological contamination;
Is recognized by lenders as an alternative to TRIPRA.
XL Group’s insurance companies offer worldwide insurance for assets that are exposed to war, terrorism and political violence attacks.