In the wake of the terrorist attacks of September 11, 2001, terrorism risk insurance in the United States became prohibitive. Subsequently, the US Congress passed the Terrorism Risk Insurance Act, which provides an assurance of government support after a catastrophic attack, thus making terrorism risk insurance affordable for businesses.

The programme is to lapse by the end of 2014 and the US Congress is considering the appropriate government role in terrorism insurance markets.

A RAND Corporation study has indicated that in a terrorist attack with losses up to $50 billion, the federal government would spend more helping to cover losses than if it had continued to support a national terrorism risk insurance programme.

A RAND release reports that in the wake of the terrorist attacks of September 11, 2001, terrorism risk insurance quickly became either unavailable or very expensive. The US Congress reacted by passing the Terrorism Risk Insurance Act, which provides an assurance of government support after a catastrophic attack. This has helped keep terrorism risk insurance affordable for businesses.

The programme will expire at the end of this year and the US Congress is considering the appropriate government role in terrorism.