What it does
CG 21 76 excludes damages arising, directly or indirectly, out of a "certified act of terrorism" that are awarded as punitive damages. It confirms that terrorism exclusions, or their absence, do not create coverage where another exclusion applies.
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
- Applies to the CGL, Liquor, OCP, Pollution, Products/Completed Operations, Railroad Protective and Underground Storage Tank coverage parts.
- 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.
- Usually attached when the insured accepts TRIA coverage, since TRIA does not reinsure punitive damages.
