Federal Terrorism Insurance Backstop Awaits Reauthorization as 2027 Expiration Nears
The federal Terrorism Risk Insurance Act (TRIA), a crucial backstop for terrorism insurance in the U.S., is awaiting reauthorization as its current term is set to expire on December 31, 2027. Prompted by the September 11, 2001, terrorist attacks, TRIA established a public-private partnership where the federal government provides a backstop for privately insured terrorism risks. Before 9/11, terrorism was typically covered by standard commercial insurance policies. However, the catastrophic nature of the attacks led insurers to seek exclusions for terrorism coverage, creating a void that threatened economic rebuilding. TRIA, enacted in 2002, ensures the availability of terrorism risk coverage, going into effect when a certified act of terrorism causes at least $5 million in losses. The U.S. House of Representatives overwhelmingly passed legislation in June to extend the program through 2034, but it still requires Senate approval and the president's signature.