Federal Terrorism Insurance Law Extended

Just five days before it was set to expire, President Bush has signed into law a seven-year extension of the federal terrorism insurance backstop.

Bush was aboard Air Force One, en route to his ranch in Crawford, Texas, when he signed the terrorism bill, along with legislation to fund the federal government and troops in Iraq.
The president did not comment on the terror bill specifically, but expressed concerns about the number and cost of earmarks in the federal budget, adding that Congress could do more to rein in government spending.

But Marc Racicot, the president of the American Insurance Association, said the reauthorization of the terrorism program, known as the Terrorism Risk Insurance Program Reauthorization and Extension Act of 2007, was essential to maintaining the nations economic security. He said the coverage has been critical to businesses that have relied upon the program for the stability and certainty it provides the private marketplace.

The seven-year extension ... will help remove the risk, uncertainty and instability in the market and will foster long-term investment and economic growth, Racicot said.

Joseph Annotti, senior vice president of the Property Casualty Insurers Association of America, also praised the presidents action.

This seven-year extension brings unprecedented certainty and stability to the terrorism insurance market and keeps in place an extremely successful and important public/private partnership that helps commercial insurance buyers and the entire economy protect themselves from the financial devastation of a future terrorist attack.

The Terrorism Risk and Insurance Act was first enacted in 2002 in the aftermath of the Sept. 11, 2001, attacks to provide $100 billion in reinsurance capacity for terror-related commercial property/casualty risks. When the original legislation expired in 2005, Congress passed a two-year extension. The current authorization was scheduled to expire Dec. 31.

By a 360-53 margin, House members voted Dec. 18 to approve a seven-year extension of the Terrorism Risk Insurance Program (BestWire, Dec. 18, 2007). The vote followed two prior attempts by the House the first in September and the second earlier this month to authorize a long-term extension of the program. Though both efforts passed by wide margins, they each were subject to veto threats from the White House, which objected to language adding group life insurance to the backstop and lowering the program's "trigger" level, among other provisions.
In the version passed, the House took up legislation that mirrored a version passed by the Senate last month. The bill eliminates the current program's distinction between foreign and domestic acts of terrorism, but otherwise keeps the program intact under roughly its current terms through 2014.

(By David Dankwa, senior associate editor, BestWeek: David.Dankwa@ambest.com) Copyright 2007 A.M. Best Company, Inc.

CLAIMS NOT COVERED BY EPL POLICY

CLAIMS NOT COVERED BY EPL POLICY

We recommend that all companies purchase Employment Practices Liability insurance. If you haven’t done so, make sure to discuss this program with your broker.

However, it’s important to understand that EPLI does not cover claims involving:


Charges, audits, and claims by the Federal Contract Compliance Programs
Workers Compensation claims
Unemployment insurance claims
Disability benefits claims, including ERISA
Any breach of independent contractor services agreement
Violations of the Fair Labor Standards Act and state equivalents
Workers Adjustment and Retraining Notification Form
COBRA
OSHA
National Labor Relations Act (union claims)
US Longshoremans and Harbor Workers Compensation Act
The Jones Act
The Labor Management Relation Act
Breach of contract claims
And other exclusions

Of course, other coverages (such as Workers Compensation, Directors & Officers, and General Liability insurance) might cover some of these exposures. The point: Be very clear about which risks you have covered with which policies and which risks remain uninsured.