1. Forms
2. IL
3. IL-09-78

What the Form Is

The IL 09 78 01 15 endorsement, titled "Alaska - Exclusion of Certified Acts Of Terrorism," is an insurance policy provision used specifically for policies issued in the state of Alaska. Its primary function is to explicitly exclude coverage for losses or damages directly or indirectly caused by or resulting from "certified acts of terrorism." A "certified act of terrorism" is one formally declared as such by the U.S. Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General, under the terms of the Terrorism Risk Insurance Act (TRIA) and its subsequent reauthorizations. This form ensures that the policy will not respond to these large-scale, government-certified events.

Classes of Business It Applies To

This exclusion endorsement is applicable to a wide range of commercial lines of insurance in Alaska. It is commonly attached to policies such as:

• Commercial Property
• Commercial General Liability
• Inland Marine
• Commercial Auto
• Other commercial liability and property coverages subject to TRIA.

Real-world examples:

• A hotel in Juneau, Alaska, might have this endorsement on its commercial property policy, meaning if a federally certified terrorist act damages the hotel, this policy would not cover the repairs.
• A fishing fleet operator based in Kodiak, Alaska, could have this exclusion on their marine or commercial liability policies, precluding coverage for incidents stemming from certified terrorism.

Special Considerations

• TRIA Compliance: The Terrorism Risk Insurance Act requires insurers to make coverage available for certified acts of terrorism. Policyholders can choose to accept or reject this coverage. This form is used when the decision is to exclude coverage for certified acts in Alaska.
• Definition of "Certified Act": It's crucial to understand that this exclusion applies only to acts of terrorism that are officially certified under TRIA. Acts of terrorism that are not certified may be treated differently under the policy, potentially being covered or excluded by other policy terms.
• Alaska Specific: This form is tailored for use in Alaska, indicating there might be specific regulatory nuances or a state-specific approach to implementing TRIA provisions.
• Disclosure: Insurers and agents must ensure proper disclosure and documentation when this exclusion is applied, confirming the policyholder understands the implications of rejecting coverage for certified acts of terrorism.

Key Information for Agents and Underwriters

• Agents: Must clearly communicate the effect of this exclusion to Alaskan clients. It's vital to explain that if this endorsement is part of their policy, they will not have coverage for losses from events certified as terrorism by the U.S. government. Documenting the client's understanding and choice is paramount.
• Underwriters: Need to ensure this form is correctly applied to policies in Alaska when coverage for certified acts of terrorism is excluded. While the direct risk of certified acts is removed from the policy, underwriters should still be aware of the overall terrorism exposure landscape. They must also ensure compliance with all TRIA-related offer and disclosure requirements.
• Pricing Implications: The premium charged for the policy should reflect the exclusion of certified acts of terrorism. If the insured had opted for TRIA coverage, a specific premium component for that coverage would typically apply.
• Potential Coverage Gaps: Agents should advise clients that this exclusion creates a significant uninsured exposure for certified terrorism events. Discussing alternative risk management strategies or the possibility of standalone terrorism coverage (if available) might be necessary for clients with higher exposure.