Risk managers fear insurance gaps if TRIA is allowed to lapse: Survey

A survey of risk professionals shows that 44.9% of respondents feel allowing a federal terrorism backstop to expire would decrease their terrorism coverage limits, while 23.8% indicate they think terrorism coverage would not be available without the federal backstop.

The survey, conducted by the New York-based Risk & Insurance Management Society Inc., also showed 11.3% of respondents indicating they think allowing the Terrorism Risk Insurance Act to expire at the end of 2014 would lead to increased terrorism insurance limits and 19.9% indicating they would expect limits to stay the same.

Of those surveyed, 85.1% said they had purchased or renewed terrorism insurance for a risk located in the U.S. within the past 18 months. Nearly all the survey respondents — 91.8% — indicated they had not had difficulty obtaining full-limit terrorism insurance coverage in any specific market, and 92.3% said they had been able to obtain adequate terrorism coverage for all their properties.

Among those who had experienced problems obtaining desired coverage, 40.3% said they responded by going without terrorism coverage, 35.8% reported accepting a limited amount of coverage, 16.4% said they worked with insurers to obtain coverage at a higher price, and 16.4% said they had formed a captive.

Most respondents — 80.1% — said they don't anticipate problems obtaining workers compensation coverage if TRIA is not reauthorized. But 67.1% of respondents said that within the past 18 months an insurer had required them to submit information on the concentration of employees at a single location, and 79.1% of those said the request came from a workers compensation insurer.

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More than three-quarters of those surveyed — 77.3% — said they don't have coverage for nuclear, biological, chemical and radiological losses, with 42.4% of those saying they didn't need NBCR coverage, 37.7% saying it wasn't offered by an insurer and 19.9% saying NBCR coverage was too costly. The vast majority of respondents — 83.3% — said they do believe coverage should be available for NBCR losses.

The survey of the RIMS membership was conducted in August and had a 4.1% response rate.

RIMS has added the survey results as an appendix to its “Terrorism Risk Insurance Act: The Commercial Consumer's Perspective” executive report issued in August.

The updated report can be downloaded for free here.