The Terrorism Risk Insurance Act and Its Significance to Real Estate Owners and Tenants

On November 26, 2002, President Bush signed into law the Terrorism Risk Insurance Act of 2002 (the “Act”). Following the catastrophic events of September 11, 2001, aftershocks have rippled through the nation’s economy. The persistent threat of terrorism, fueled by continuous news reports and federal and local alerts of imminent terrorist activity – which have fortunately failed to materialize – has adversely impacted economic activity, particularly real estate development and financing due to the unavailability of commercial terrorism risk coverage. For months prior to the Act’s passage, insurers, reinsurers, lenders and real estate owners and developers lobbied Congress for national terrorism insurance legislation. President Bush placed the Act high on his domestic policy agenda (second only to the Homeland Security Act of 2002), declaring that it was essential to jumpstart the ailing economy and to create thousands of new jobs.

Now that the Act has become law, this White Paper will consider its meaning for real estate owners and tenants in the context of the current highly charged climate.

For the full story, please view the PDF.