Massachusetts Governor Deval Patrick has signed H.960 into law.  The legislation permits commercial property carriers to exclude coverage for fire damage that follows from an act of terrorism, directly or indirectly.  A copy of the enrolled legislation is available here.

The new legislation becomes effective on April 13, 2011.  The change is significant because it permits first-party property carriers to write policies that exclude terrorism-related ensuing loss claims, where the insured has not purchased terrorism coverage.  The legislature’s action was necessary because, by law,  Massachusetts has defined what must be contained in the standard commercial fire insurance policy.  The move places Massachusetts squarely in the middle of states to have taken this action: it joins fourteen of the twenty-seven other states with standard fire policy statutes in excluding coverage for terrorism-related acts.