TERRORISM RISK INSURANCE ACT OF 2002
(As amended and extended by The Terrorism Risk Insurance Extension Act of 2005 and The Terrorism Risk Insurance Program Reauthorization Acts of 2007, 2015 and 2019)
NOTICE TO PRODUCER: The applicant must be made aware of the opportunity to purchase the coverage contained in the Applicant Disclosure described below. Any request from you to bind the coverage offered in this quote must include advice to us regarding the applicant’s choice for terrorism insurance coverage. The premium stated in the disclosure is for terrorism insurance coverage only.
APPLICANT DISCLOSURE: NOTICE AND OFFER OF TERRORISM INSURANCE COVERAGE
You are hereby notified that under the Terrorism Risk Insurance Act of 2002, as amended, hereinafter referred to as ‘the Act,’ you have a right to purchase insurance coverage for losses arising out of acts of terrorism, as defined in Section 102(1) of the Act: “The term “act of terrorism” means any act that is certified by the Secretary of the Treasury — in consultation with the Secretary of Homeland Security, 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 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 United States Government by coercion.”
PURCHASE OF THE INSURANCE OFFERED IN THIS DISCLOSURE HAS THE EFFECT OF NULLIFYING TERRORISM EXCLUSIONS CONTAINED IN NEW OR RENEWAL POLICIES FOR ACTS OF TERRORISM, AS DEFINED IN THE ACT. HOWEVER, ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED, AND YOUR POLICY MAY CONTAIN OTHER EXCLUSIONS THAT MIGHT AFFECT YOUR COVERAGE. IF THIS COVERAGE IS NOT PURCHASED, THE COVERAGE AFFORDED BY THE POLICY WILL BE THAT WHICH WOULD APPLY IN THE ABSENCE OF THE ACT.
IF PURCHASED, COVERAGE AFFORDED FOR LOSSES CAUSED BY CERTIFIED ACTS OF TERRORISM MAY BE PARTIALLY REIMBURSED BY THE U.S. GOVERNMENT UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. UNDER THIS FORMULA, IF THE AGGREGATE INSURED LOSSES EXCEED A TRIGGER AMOUNT ($200,000,000 BEGINNING ON JANUARY 1, 2020), THE U.S. GOVERNMENT GENERALLY PAYS A PERCENTAGE (80% BEGINNING ON JANUARY 1, 2020) OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED DEDUCTIBLE PAID BY THE INSURANCE COMPANY PROVIDING THE COVERAGE. THE PREMIUM CHARGE FOR THIS COVERAGE DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF LOSS COVERED BY THE U.S. GOVERNMENT UNDER THE ACT.
YOU SHOULD ALSO KNOW THAT THE ACT, CONTAINS A PROGRAM CAP OF $100,000,000,000 THAT LIMITS U.S. GOVERNMENT REIMBURSEMENT AS WELL AS INSURERS’ LIABILITY FOR LOSES RESULTING FROM CERTIFIED ACTS OF TERRORISM WHEN THE AMOUNT OF SUCH LOSSES IN ONE CALENDAR YEAR EXCEEDS THE PROGRAM CAP. IF THE AGGREGATE INSURED LOSSES FOR ALL INSURERS EXCEEDS THE PROGRAM CAP, YOUR COVERAGE MAY BE REDUCED.
PREMIUM FOR TERRORISM INSURANCE COVERAGE (which is in addition to the “Total Premium”, and is subject to any applicable state taxes and surcharges) IS $Zero.
In accordance with the provisions of the Act, the Terrorism Risk Insurance Program shall terminate on December 31, 2027. Unless the program is renewed, extended or otherwise continued by the federal government, insurance coverage purchased for losses arising out of acts of terrorism shall terminate as of the date when any one or more of the following first occurs: (a) the policy period ends; (b) the federal Terrorism Risk Insurance Program, established by the Act, has terminated either in its entirety or as respects the type of insurance afforded by this policy; or (c) renewal, extension or continuation of the Terrorism Risk Insurance Program has become effective without a requirement to make terrorism coverage available as respects the type of insurance afforded by this policy.
If the insurance is not terminated upon the occurrence of b. or c. above, insurance will remain in force without change for the remainder of the policy period, unless the company notifies you of any such change in response to any change in the federal law.
If the insurance is terminated upon the occurrence of b. or c. above, pro rata unearned premium will be returned to you.
