A Terrorism Coverage Availability Clash

"These statements are clearly misleading," the Council said.

While small businesses outside of major metropolitan areas may comprise the largest aggregate number of commercial risks, they do not account for the majority of premiums written, the Council said.

"The areas of real distress?that is a growing and potent threat to the national economic well-being?are the mid-size and larger businesses, which continue to struggle to secure terrorism coverage," the Council said.

The Council's comments came amid fears that the Senate is deadlocked on the issue of providing a federal backstop for the terrorism insurance market.

Sources told National Underwriter that, despite the strong support for legislation from the Bush administration, some Republican leaders in the Senate are still questioning the underlying theory of the bill, which is that terrorism risks are uninsurable.

These questions are emerging at the same time that the Senate remains at odds over the issue of how much tort reform should be in a final bill.

But the Council said that the economy is at risk from the absence of a federal backstop.

Noting its recent Commercial Insurance Market Index, the Council said that insurers continue to place sharp restrictions on terrorism risks, ranging from wholesale exclusions to low sublimits and high deductibles.

There are also reports that some insurers are no longer offering statutory limits for mandatory coverages like workers' compensation.

"The Council deplores the implication that sufficient coverage is currently available in the market to meet the needs of 75-to-85 percent of American commercial enterprise, when construction, transportation, cargo, heavy industry, hospitals, nursing homes and housing?all precious national resources?cannot find sufficient coverage or capacity in the post-Sept. 11 market," the Council said.