Commercial insurance buyers urge terrorism pool

U.S. trade associations representing the real estate, tourism and retail industries, among others, are joining forces to push the federal government to devise a solution to terrorism reinsurance. Groups including the U.S. Chamber of Commerce, the Bond Market Association, and even the National Football League have formed the Coalition to Insure Against Terrorism, which will lobby Congress to come up with a federally-backed terrorism pool in light of the absence of coverage available in the marketplace.
“Gaps I insurance coverage against acts of terrorism weaken our economy, and pose a very real threat to our homeland security,” says Martin DePoy, coalition spokesperson, from the National Association of Real Estate Investment Trusts. “”Unfortunately, the insurance industry has neither the capacity nor the willingness to underwrite comprehensive terrorism coverage at this point in time.”
The coalition notes that without government intervention terrorism coverage will be unavailable or only available at cost-prohibitive rates. DePoy says that if future terrorist attacks take place, the result could be “catastrophic” for U.S. businesses.
The National Association of Mutual Insurance Companies responded to the coalition with support, saying it represents “another sure sign that not all is well in terrorism insurance and Congress needs to pass a bill”.
The Risk and Insurance Management Society, which represents commercial insurance buyers, has been lobbying and is asking its member for evidence of the hardships beign faced in light of the lack of terrorism coverage. Also, the Society’s Ontario chapter is asking its members to offer similar testimony, so that the Canadian government might be convinced to act as well.
The Insurance Bureau of Canada (IBC) has been lobbying the federal government to act as an excess reinsurer on terrorism coverage, but so far the Canadian government has been willing to act in the absence of a U.S. decision. This lobby effort has been joined by the Canadian Risk Management Council (CRMC), representing Canadian risk managers.