Nearly half (45 percent) of risk managers expect terrorismcoverage limits to decrease if TRIA is not re-authorized, shows apoll by the Risk and Insurance Management Society (RIMS), and aquarter believes this would terminate terrorism coverageentirely.

“TRIA is integral to keeping affordable lines of terrorisminsurance available to all organizations conducting business in theUnited States,” says RIMS board director Carolyn Snow. “Without it, not only will individualorganizations be more exposed in the event of a terrorist attack,our federal government would also take on the extraordinary burdenof supporting its constituents during, an often costly, rebuildingprocess.”

RIMS has publically voiced its support of TRIA reauthorization,and states in its report, Terrorism Risk Insurance Act: TheCommercial Consumer's Perspective, that offering a governmentbackstop on acts of terrorism causing $100 million or more ininsured losses is an economic necessity.

Without TRIA, says RIMS, organizations may be forced toself-insure for terrorism attacks, which would inadequately protectbusinesses from a serious terrorist strike; also, because theprivate policies that would be required by lenders come with“unreasonable” premiums, businesses may be unable to securefinancing for projects, slowing the present economy.

A poll of RIMS members states the majority—85 percent—of riskmanagers have purchased or renewed terrorism insurance within theU.S. in the past year, mostly to protect the company from liabilityin the event of an attack.

The second-top reason survey respondents gave for purchasingterrorism insurance was the location of their organization'sassets. However, more than 70 percent of respondents had less than25 percent of their assets located in one of 11 major U.S. cities,such as New York or Houston.

“This reinforces RIMS' position that terrorism insurancerecertification is not a concern limited to big cities,” saysJanice Ochenkowski, managing director of real estate servicescompany Jones Lang Lasalle, former RIMS president and author of thereport. “Public entities may be concerned over the physicallocations of their assets even if they are scattered across thecountry.

92 percent of respondents have had no difficulty obtaining fulllimit terrorism insurance coverage in any market, with 92 percentsaying they are able to obtain adequate terrorism coverage for alltheir properties.

If they did encounter trouble, 40 percent of risk managers'companies went without terrorism insurance, and nearly as many saidthey accepted a limited amount of coverage.

“If buyer's responses are to non-renew their policies, theninsurers and reinsurers will drop from the market,” saysOchenkowski. “Prices will increase, and insurance buyers won't beable to get coverage or choose it because of its expense.”

Currently, 66 percent of respondents don't use stand-aloneterrorism coverage, and 74.8 percent don't use any terrorism risktransfer alternatives such as captives, cat bonds or reinsurance.Only 16.4 percent equally said they paid a higher price forcoverage from another carrier or established a terrorism-insurancecaptive.