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Terrorism Risk Insurance Act of 2002

On November 26, 2002, President Bush signed into law the Terrorism Risk Insurance Act, establishing a program whereby the federal government and the insurance industry share the risk of loss from future terrorist attacks.

The act makes terrorism insurance available to all commercial policyholders who choose to purchase the coverage. Any existing policies with terrorism exclusions have been temporarily voided by the Act and carriers are required to make formal offers for coverage to policyholders by February 26, 2003. Some carriers may charge an additional premium for the coverage and others may make no charge. Workers’ Compensation policies do not—and will not—exclude terrorism coverage.

Please note that personal insurance (home, auto and the like), crop and medical malpractice insurance are not included in the act and that the law covers only acts of terrorism conducted by or for a foreign interest. Domestic terrorist acts are not included.

You will be receiving a notification form from your insurance carrier that will ask you to indicate whether you wish to accept or decline terrorism coverage and you will need to return the form to the insurance company within 30 days of receipt.

To view the complete Terrorism Risk Insurance Act, please click here.

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