Policyholders Face Uncertainty After Lapse Of Terrorism Risk Insurance Program

Congress' failure to renew the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), a 2007 extension of the 2002 Terrorism Risk Insurance Act, could have significant implications for companies that rely upon property or casualty policies to manage risk. TRIPRA expired on December 31, 2014, potentially triggering policy endorsements that exclude coverage, previously provided under those policies, for loss or damage arising from acts of terrorism. Standard property and casualty policies issued as of January 1, 2015 will also likely exclude such coverage now that carriers can no longer rely upon TRIPRA, under which the federal government bore a significant portion of insured losses caused by terrorism. It remains to be seen whether insurance carriers will offer terrorism risk insurance going forward, how such coverage will be priced if it is available, and whether the new Congress will extend the Terrorism Risk Insurance Act. In all events, policyholders should