The U.S. is now at war with ISIS. President Obama has authorized military action and attacks have happened in Iraq and Syria and more will happen in the future. “I have made it clear that we will hunt down terrorists who threaten our country, wherever they are. This is a core principle of my presidency: If you threaten America, you will find no safe haven,” Obama said.
His words and the attacks have prompted ISIS and its Middle East companion terrorist group Khorasan to issue threats to the U.S. Both groups are calling for attacks in our country. Murder, mass murder, executions and more are being urged.
Insurance Information Institute (I.I.I.) President Dr. Robert Hartwig said this is why the renewal of the Terrorism Risk Insurance Act (TRIA) — currently stalled in Congress — needs to be extended and it needs to be done before TRIA expires on December 31 of this year.
“The recent intensification of threats to American interests around the world from new terrorist organizations, including ISIS and Khorasan, demonstrate the need for TRIPRA’s extension. Since its creation in 2002, the federal Terrorism Risk Insurance Act, and its successors, have been critical components of the U.S.’s national economic security infrastructure,” Hartwig said.
Since 9/11 we’ve experienced one — that we know of — terrorist action. It was the April 2013 Boston Marathon bombing. Businesses in Boston think it was a terrorist attack but the U.S. Treasury — who is responsible for such things — has not said it was or wasn’t.
| Dr. Robert Hartwig|
So a bunch of Boston businesses are still waiting on whether they will get action on their business interruption claims. The Massachusetts Division of Insurance said 132 of the 207 claims filed after the bombing were for business interruption. To date just 83% of those claims have been closed and just half that number resulted in a payout.
The rest are outstanding.
All this goes back to the vague definition of terrorism by the federal government and the insurance industry. Terrorism isn’t covered — generally — by business interruption policies. And we come full circle back to the U.S. Treasury. It is not required to deem an act like the Boston Marathon bombing an act of terrorism unless insured losses hit $5 million.
They’re not there yet.
However, the US Treasury Department, which is tasked with determining whether an event is an act of terrorism, has not yet done so. At the same time, the Terrorism Risk Insurance Act (TRIA) doesn’t require the Treasury to make a determination unless insured losses total at least $5 million.
Sources: Insurance Business America, Insurance Business America