The Terrorism Risk Insurance Act

November 1, 2003

4 Min Read
The Terrorism Risk Insurance Act

Last year, when you opened your holiday mail, you most likely found a greeting from your insurance company regarding your storage policy and the Terrorism Risk Insurance Act of 2002 (TRIA). You received this because shortly after the terrorism attacks of Sept. 11, 2001, building owners and managers were having a hard time securing adequate terrorism insurance at affordable rates and on reasonable terms.

President Bush signed the TRIA into law a year ago, making it so private insurers and the federal government share the risk of future losses from terrorism for the next three years. This law allows no exclusions to any states and gives policyholders the option to accept or decline the coverage. With the United States going in and out of heightened states of alert, storage owners across the nation are continually analyzing whether to buy or continue their terrorism coverage. Some are declining because they deem it unnecessary or too expensive. Some are simply counting on the government to help them out if another attack does occur.

The next time your policy is up for renewal, take some of the following information into consideration before you decide to accept or decline coverage:

Facts About the Terrorism Risk Insurance Act

  • It is a mandatory federal program that expires in 2006.

  • It covers events that cause at least $5 million in damages.

  • It covers only foreign-led attacks on U.S. property.

  • It does not cover nuclear, chemical or biological attacks.

  • The federal government pays for 90 percent of any losses above a companys deductible.

  • The insurer of record is responsible for 10 percent of any losses.

  • Annual losses covered by the program are capped at $100 billion.

As defined in Section 102(1) of the Act, act of terrorism means any act certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States, to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property or infrastructure; to have resulted in damage within the United States, or outside the United States in the case of an air carrier or vessel or the premises of a United States mission; and to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the U.S. government by coercion.

It is no secret those who wish to hoard dangerous chemicals or explosives can do so in a self-storage unit. When it comes to terrorism, it is better to be too cautious than not. Most people use their geographical location and business type to help determine their risk of terrorist attacks and the need for terrorism coverage. Even though you feel secure about your facility not being a target for terrorism, alternative preparation is not a waste of effort for anyone in the storage industry. The following is a partial list of protective measures storage owners can take that are recommended by the Department of Homeland Security:

  • Maintain situational awareness of world events and ongoing threats.

  • Ensure all levels of personnel are notified via briefings, e-mail, voice mail and signage of any changes in threat conditions and protective measures.

  • Encourage personnel to be alert and immediately report any situation that appears to constitute a threat or suspicious activity.

  • Encourage personnel to take notice and report suspicious packages, devices, unattended briefcases or other unusual materials immediately; inform them not to handle or attempt to move any such object.

  • Encourage personnel to know emergency exits and stairwells and the locations of rally points to ensure the safe egress of all employees.

  • Increase the number of visible security personnel wherever possible.

  • Institute/increase vehicle, foot and roving security patrols varying in size, timing and routes.

  • Implement random security-guard shift changes.

  • Coordinate and establish partnerships with local authorities to develop intelligence and information sharing relationships.

  • Limit the number of access points and strictly enforce access-control procedures.

  • Approach all illegally parked vehicles in and around facilities, question drivers and direct them to move immediately; if the owner cannot be identified, have the vehicle towed by law enforcement.

  • Consider installing caller I.D.; record phone calls, if necessary.

  • Increase perimeter lighting.

  • Deploy visible security cameras and motion sensors.

  • Institute a robust vehicle-inspection program to include checking under the undercarriage of vehicles, under the hood and in the trunk. Provide vehicle inspection training to security personnel.

  • Conduct vulnerability studies focusing on physical security, structural engineering, infrastructure engineering, power, water and air infiltration, if feasible.

  • Initiate a system to enhance mail and package screening procedures (both announced and unannounced).

  • Install special locking devices on manhole covers in and around facilities.

Universal Insurance Facilities Ltd. offers a comprehensive package of coverages specifically designed to meet the needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, write P.O. Box 40079, Phoenix, AZ 85067-0079; call 800.844.2101; fax 480.970.6240; e-mail [email protected]; visit

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