The Massachusetts Joint Committee on Financial Services recently held a hearing regarding H.B. 960 (the “Bill”), which would permit commercial fire policyholders to exclude terrorism from their coverage. Whereas terrorism coverage is currently mandated under Massachusetts law, the Bill would bring Massachusetts in line with the federal Terrorism Risk Insurance Act (TRIA) that requires terrorism coverage be available to policyholders, but allows them to reject it.
The Bill is supported by the American Insurance Association (AIA) because it will allow policyholders to purchase “products tailored to their business needs rather than standardized products.” If enacted, the Bill would make Massachusetts the fifteenth state to allow for terrorism exclusions of the twenty-eight states that have standard fire policy provisions according to figures reported by the AIA.
