Federal Laws Addressing Liability

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Terrorism Risk Insurance Act of 2002

To stabilize insurance markets after the September 11th events, Congress required insurance companies to make available coverage for insured losses in all property and casualty programs, despite any pre-existing exclusion for claims arising out of an act of terrorism, and to offer insurance for insured losses that are similar to coverage applicable to losses from other events. In turn, Congress provided that the Federal Government would, in effect, act as an excess insurer and reimburse insurance companies up to ninety percent of their losses above insurer deductibles. Congress also capped at $100 billion the annual aggregate insured losses for which the Federal Government or an insurer which had met its limits would be liable. The program is to last for three years. The Terrorism Risk Insurance Act, Pub. L. No. 107-297, also provided that causes of action for personal injury, property damage, or death arising out of an act of terrorism are to be brought exclusively in federal court. The substantive law for the cause of action is to be derived from the law of the state where the act of terrorism occurred. This provision does not apply to any person who knowingly participates in, conspires to commit, aids and abets, or commits an act of terrorism.