AAIS Policy Language On Terror

The group said that, as with all its new property-casualty terrorism endorsements, insurance practitioners need to know four things concerning each endorsement:

? How an endorsement applies to losses arising from "certified" acts of terrorism, which are covered under the new federal program. (Certification is restricted to events inspired, directed, or carried out by foreigners that cause more than $5 million in damages.)

? How an endorsement applies to direct fire losses resulting from certified terrorist acts in "Standard Fire Policy" states. (These states require property insurers to cover "fire following" losses, even when coverage for the event causing the fire is excluded.)

? How an endorsement applies to losses arising from "non-certified" acts of terrorism. (Non-certified terrorist acts are, by definition, all those that are not certified for coverage under the federal program, and include all acts of domestic terrorism.)

? How an endorsement applies to direct fire losses resulting from non-certified terrorist acts in "Standard Fire Policy" states.

The table, prepared by Robert Prahl, AAIS director of education, lists all new terrorism endorsements developed and filed for 12 AAIS commercial lines and farm programs.

AAIS said that with the table, readers can see for each endorsement whether it excludes or grants coverage for each of the four categories listed above, whether coverage is limited for a certain category, and what must be done to clarify a policy.

A copy of the table, can be viewed by accessing the Web sit www.AAISonline.com, clicking on the icon for "Terrorism: The New Rules," and following the links.

AAIS said producers and underwriters can use the table to readily identify endorsements that meet their policywriting needs. Entries for each endorsement will identify when an additional endorsement is required.