Insurance: terrorism coverage cost dip brings more buyers.While rates dropped 42 percent in the fourth quarter of 2003 from the second quarter, a new study shows that only one in three companies purchased insurance against terrorism risk--although that percentage of purchasers is higher than in any prior period. The study of 2,400 U.S. businesses by global risk and insurance-services firm Marsh Inc. finds that the percentage of businesses purchasing the coverage rose to more than 32.7 percent from 27.3 percent. "As prices have come down, more companies are purchasing terrorism insurance--both under the Terrorism Risk Insurance Act The Terrorism Risk Insurance Act (TRIA) is a United States federal law signed into law by President George W. Bush on November 26, 2002. The Act created a federal "backstop" for insurance claims related to acts of terrorism. of 2002 (TRIA TRIA Terrorism Risk Insurance Act of 2002 TRIA Term Requirement in Average ) and the stand-alone terrorism insurance Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities. It is considered to be a difficult product for insurance companies, as the odds of terrorist attacks are very policies offered by various insurers," said Jill Dalton, a managing director of Marsh and North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Property Practice Leader. In the aftermath of 9/11, insurance companies excluded terrorism risks from their commercial policies. TRIA, signed into law by President Bush in November 2002, requires insurance companies to offer insurance for certain acts of terrorism in the U.S. that are certified by the Secretary of the U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. Department, the Secretary of State and the Attorney General. Terrorism coverage offered under TRIA must be in amounts and have terms and conditions that do not differ materially from buyers' other policies. As an alternative, businesses can purchase separate, "stand-alone" terrorism insurance policies that do not require U.S. government certification. The report notes that several factors are currently motivating purchasing terrorism insurance. These include: * Lender Requirements. To protect their investments, banks may require borrowers to buy insurance. * Corporate Governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. . A firm's board of directors may determine that prudent governance requires terrorism insurance. * Directors and Officers (D & O) Coverage Requirements. A company's D & O insurer may exclude such coverage if the company fails to insure certain exposures, including terrorism. * More Affordable Pricing. While costs for many commercial insurers have gradually come down since last fall, these costs differ widely for different risks. * Government Alerts. A company's decision-making process may be affected by the heightening height·en v. height·ened, height·en·ing, height·ens v.tr. 1. To raise or increase the quantity or degree of; intensify. 2. To make high or higher; raise. v.intr. or lowering of terrorism risk alerts. Energy companies were the most receptive to purchasing terrorism insurance (40.5 percent). Media companies were second, at 35.3 percent, followed by food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. companies (34.7 percent), habitational and hospitality industries (31.5 percent) and healthcare (31.0 percent). Among all businesses, those with total insured property values between $500 million and $1 billion were most likely to purchase. |
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