In the United States, a hotly debated industry issue is the future of the Terrorism Risk Insurance Program . We have recently seen a proposal in a House Bill to extend and expand TRIA (click here to review TRIA Extension). The proposed expansion, however, does not extend TRIA’s scope beyond acts of terrorism — acts of war would not be covered by the Program. Since September 11, however, the distinction between terrorism and war has been blurred by recent hostile activity across the world. At times, it is not always clear if the activity is by a government-sponsored group, or by terrorists acting without government authority or backing.
A recent announcement by Lloyd’s managing agent Managing Agency Partners of an innovative new policy to protect Israeli tourists against BOTH terrorism and war obviates the need to distinguish between acts of terrorism and acts of war. The benefits of the scope of such a policy is evidenced by Israel’s conflict last year with Lebanon. Israel’s opponent in the conflict was not the nation-state of Lebanon, but rather Hezbollah, a terrorist group residing within Lebanon’s borders. This new policy removes the requirement of a determination of whether losses arise from acts of war or acts of terrorism.