On October 10, 2003 the U.S. Treasury Department announced further regulations under the Terrorism Risk Insurance Act (TRIA) of 2002 that was signed into law on November 26, 2002. This is a temporary federal reinsurance program designed to encourage the development of private sector resources and arrangements for diffusing the risk of loss to acts of international terrorism. The recent additions include the disclosure and “make available” requirements and the participation of state residual market insurance entities and state workers’ compensation funds. The Act’s authority will expire on December 31, 2005, when it is hoped that the industry will have developed a terrorism risk insurance market and methods to manage exposures. The TRIA uses a formula to reimburse 90% of covered terrorism losses exceeding the statutorily established deductible paid by the insurer providing the coverage. The limit of the Act is 100 billion dollars in any given year. To meet the definition of an act of terrorism, it must:
- have resulted in damage within the United States, (or outside the US in the case of an air carrier or vessel or the premises of a US mission or embassy).
- have been a violent act or an act that is dangerous to human life, property; or infrastructure
- have been committed by an individual or individual 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 US Government by coercion.
- have produced property and casualty insurance losses in excess of $5M.
All of the terrorist acts of 2001 were directed towards workers in the workplace. People were not attacked at home or play. Yet only the Pentagon and World Trade Center attacks would meet the above definition. To date, the anthrax letters have not been linked to a foreign person or foreign interest. Nor would the Oklahoma City bombing of 1995 have met this definition, as those convicted were native citizens.
The World Trade Center attacks of September11, 2001 have resulted in 6,500 Worker’s Compensation claims (2,200 death and 4,100 injuries) with about 1,000 being stress-only claims. The total Worker’s Compensation costs may be 5 billion dollars. The occupational homicide death total for that year was fivefold the average year. Financial services had heretofore been a very low risk occupation. The EPA predicts that late and latent claims from asbestos, lead, cadmium, mercury, PCB’s, benzene, and chromium released from the WTC sites may be filed over a periods of decades.
Terrorism by design uses the elements of surprise, vulnerability, and stress-induction to create chaos and coercion. Bioterrorism uses unseen agents with delayed recognition and possible dissemination by human-to-human contagion to allow time for the escape of the perpetrators. Very little knowledge exists on effective workplace-based prevention or counter-terrorism, so preparedness in the workplace may be limited to training for awareness and developing disaster plans to minimize losses and confusion should an attack occur. Some up-to-date websites and references are attached.
Unlike other conflicts, there is no truce, treaty or other clear end point to the war on terrorism. It is likely that employers, workers, and the workplace will remain targets of terrorists.
Dr Daymon Evans is Medical Director of Employee Occupational Health Services for the Community Health Network, and is a part-time civilian Preventive Medicine Physician for the Department of Defense. He is board certified in Occupational Medicine, Emergency Medicine, and Public Health and General Preventive Medicine. He served on the Mayor’s (Indianapolis) Terrorism Task Force Medical Committee and is the occupational health representative to the Indiana State Department of Health Bioterrorism Advisory Committee.
The Terrorism Risk Insurance Act Program of 2002
Text of Treasury Department Press Release, October 10, 2003
EQECAT (catastrophic model):
Coalition to Insure Against Terrorism
U.S. Homeland Security. (Personal pre- and post-event planning & advice)
U.S. Postal Services, Mail Center Security Guidelines
Suspicious Mai/Package Posters
Bombs by Mail
EPA World Trade Center monitoring reports
Federal Emergency Management Agency
Emergency Management Guide for Business and Industry
Terrorism Insurance: What Risk and Insurance Professionals Must Know
International Risk Management Institute, Inc.
12222 Merit Drive, Suite 1450
Dallas, TX 75251