TRIA (Terrorism Risk Insurance Act)

TRIA — the Terrorism Risk Insurance Act, first enacted in 2002 and reauthorized since — is a federal program that makes terrorism coverage available and affordable for commercial insureds by having the U.S. government share catastrophic terrorism losses with insurers. It is administered by the Treasury's Terrorism Risk Insurance Program (TRIP).

Under TRIA, insurers writing most commercial property and general liability lines must offer coverage for certified acts of terrorism; the business can accept or reject it (often for a separate premium shown on the policy). If terrorism is rejected, a terrorism exclusion typically applies. Lenders and landlords frequently require insureds to carry the coverage.

The federal backstop only engages once certified terrorism losses exceed a program trigger, after which the government reimburses a share of insurer losses above each carrier's deductible. For a business buyer, the practical decision is simply whether to accept the offered terrorism coverage — usually inexpensive relative to the catastrophic exposure it addresses.