Acts of terrorism are man-made, infrequent, potentially catastrophic and coordinated to overcome loss mitigation efforts, which means quantitative risk models can’t be used to accurately analyze the risk. These tools only work for exposures to disasters such as hurricanes, where there is extensive loss experience.
Unlike natural disasters, terrorist attacks are purposeful strikes against America and the American way of life, therefore concentrating on high-value or life-dense targets. Terrorism has no season, no region, no reliable pattern.
Clearly, terrorism continues to pose a threat to our nation, to American businesses and to our economy, in spite of the fact that businesses across the nation have spent hundreds of millions of dollars on enhanced security measures and risk mitigation since Sept. 11.
Economic security is central to homeland security. It is what terrorists are targeting. Without adequate insurance coverage, America’s economic stability is totally exposed. TRIA was part of an overall approach to protect the U.S. economy, including the Patriot Act and establishment of the Department of Homeland Security.
Involvement here is the proper role for our government because national security is primarily a federal responsibility. Unless the federal plan is continued, terrorism risk will once again be uninsurable, and we would expect a period of profound economic havoc, posing a very real threat to our nation’s security.
Now is the time for Congress to address the problem and enact an extension.
Martin DePoy is coordinator of the Coalition to Insure Against Terrorism, which represents businesses and organizations in the transportation, real estate, manufacturing, construction, entertainment and retail sectors. He is also a senior member of the staff at the Bockorny Group.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.