Congress’ failure to authorize an extension of the Terrorism Risk Insurance Program Reauthorization Act of 2014, (TRIPRA) has the potential to create serious disruption for many businesses who depend on the backstop for property, liability, workers compensation and captive insurance programs. Willis is actively working with clients and carriers to determine alternative options in what is currently a very fluid environment.
The biggest concern right now is that businesses will need help in reevaluating their risk exposures according to the changed environment where TRIA is no longer available as a backstop for the insurance market place. Of particular concern is where clients have loan covenants that determine the type and amount of terrorism insurance coverage that is required. As of January 1, they may find themselves in breach of contract.
At present there is not a consistent approach from the insurance carrier community and, as such, we recommend that clients work closely with their Willis representative in ensuring adequate coverage is in place. There does remain a vibrant stand-alone terrorism solution which can be explored once clients have evaluated their needs.
The situation remains fluid and we will be updating advisories when we receive more clarity from the insurance carriers.
December 19 Update
Willis has issued a TRIA advisory for our clients. I welcome you to download it: Planning for TRIA’s Expiration: Next Steps for Terrorism Insurance Policyholders