Extending the Terrorism Risk Insurance Act will help US business

Consider a federal program that could simultaneously save taxpayers billions of dollars and enhance national security — all while protecting U.S. jobs and businesses. You would support it, wouldn’t you?

For the last dozen years, the Terrorism Risk Insurance Act, or TRIA, has been quietly but effectively safeguarding the U.S. economy against potential ruin. Congress enacted TRIA in the wake of 9/11, when reinsurers and primary insurers — after paying out more than $30 billion in claims — withdrew from the terrorism risk insurance marketplace. The result: a lack of coverage that led to the loss of 300,000 jobs.


Since it was enacted in 2002, TRIA has successfully worked to fix a broken marketplace — bringing private insurers back to the table so that businesses around the country could secure the coverage that they require, realigning the gears of our economy, and putting Americans back to work.

Additionally, while no one wants to envision another 9/11, the threat remains, and we must be prepared. In the event of another attack on the United States, TRIA stands ready to help mitigate some of the economic consequences by ensuring that losses can be paid out and businesses can start to rebuild quickly and efficiently.

TRIA also makes smart budgetary sense. According to a new RAND Corp. study, TRIA could save the federal government and American taxpayers billions that would otherwise be spent on disaster assistance in the wake of a terrorist attack.

The study found that following a terrorist attack resulting in losses of $26 billion — approximately the magnitude of the 9/11 attacks — the federal government would spend $7.2 billion more without TRIA than with it.

By ensuring availability of terrorism insurance, TRIA also enhances our national security. Through the program’s framework, businesses can more quickly and effectively recover, which makes communities more resilient to future terrorist attacks or natural disasters.

For the 3 million businesses represented by the U.S. Chamber — from small mom-and-pops to major corporations — TRIA isn’t just a nice thing to have; it’s a necessity.

Let’s not forget that, in the wake of 9/11, massive job losses resulted because primary insurers and reinsurers withdrew from the terrorism risk insurance market. The lack of availability in coverage stunted economic activity across the country.

TRIA has restored terrorism risk coverage to the market and brought peace of mind to American employers. Unfortunately, uncertainty about whether TRIA will be reauthorized before its scheduled expiration at the end of the year already is producing disruption in the marketplace. Main street businesses across the country are already receiving notices that their terrorism coverage will be voided after Dec. 31. Even some workers’ compensation insurers have stopped underwriting risks of employers in certain high-profile industries with large employee concentrations or in certain major cities.

Our nation cannot afford to wait any longer for this critical program to be reauthorized. Without it, terrorism insurance will become unavailable or prohibitively expensive, construction projects will grind to a halt and Americans will lose jobs.

TRIA cannot stop a terrorist attack, but it can help mitigate the economic impact. Letting TRIA expire would leave our economy vulnerable, threaten U.S. businesses and jobs, and jeopardize national security. The time is now to reauthorize this vital program.
Donohue is president and CEO of the Chamber of Commerce.