What it does
CG 21 70 01 15 is Cap On Losses From Certified Acts Of Terrorism. It confirms that if aggregate insured losses from certified acts exceed the TRIA program cap in a year, the insurer is not liable for losses above the cap.
Who needs it
All commercial accounts. Larger urban, hospitality, venue, healthcare and infrastructure risks pay the most attention to terrorism terms.
Key provisions and limits
- A "certified act of terrorism" is an act certified by the Secretary of the Treasury under the federal Terrorism Risk Insurance Act; the criteria in the ISO forms include insured losses over $5 million in the aggregate and a violent act committed to coerce the U.S. civilian population or influence U.S. government policy.
Quoting and selling notes
- Under TRIA, insurers must offer certified terrorism coverage; the insured can accept or reject it. Keep the signed offer and rejection forms (IL series) with the file.
- Explain to clients that accepting TRIA coverage keeps terrorism claims covered subject to the federal cap.
Explaining terrorism options
- Accepting TRIA coverage keeps certified terrorism losses covered subject to the program cap; the premium charged for terrorism must be shown separately.
- Some states restrict terrorism exclusions on certain causes (for example fire following terrorism on property policies); GL elections should still be documented on the carrier's disclosure form.
