Terrorism coverage, decided on purpose.
Commercial property and casualty quotes come with a terrorism offer because of the federal Terrorism Risk Insurance Act. I explain what accepting or declining it means for your building, your liability and your loan.
Quick answer TRIA terrorism coverage is the terrorism coverage insurance companies must make available on commercial property and casualty policies under the federal Terrorism Risk Insurance Act, and you can accept or decline it.
- The Terrorism Risk Insurance Act of 2002 created a federal program, run by the Secretary of the Treasury, that shares insured losses from certified acts of terrorism with insurance companies.
- A business can decline TRIA terrorism coverage, but if it keeps it, the premium charged for it must be disclosed clearly and conspicuously.
- Congress most recently reauthorized TRIA in December 2019, and current law runs the federal terrorism program through December 31, 2027.
- Terrorism can't be excluded from workers' compensation policies in any state.
- The federal terrorism program leaves out commercial auto, professional liability other than D&O, medical malpractice, NFIP flood, and health and life insurance, among other lines.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed November 2026 · How this page is researched
A federal backstop behind your policy
The Terrorism Risk Insurance Act, signed in November 2002, set up a temporary federal program that shares insured losses from a certified act of terrorism with insurance companies. Congress has reauthorized it several times, most recently in December 2019, and current law runs it through December 31, 2027. You don't buy anything from the government. The program sits behind the commercial policy you already carry.
Because of that law, insurance companies have to make terrorism coverage available on commercial property and casualty policies, on terms that don't differ materially from the rest of the policy, and the premium for it has to be shown to you clearly. You can take it or decline it. Before you sign either way, I read what you own, what your loan agreement says and what your leases and contracts require.
- Certified actsTreasury certifies an act after consulting Homeland Security and the Attorney General; property and casualty losses must top $5 million.
- Program triggerFederal sharing begins only when industry insured losses from certified acts pass $200 million in a calendar year.
- Federal shareEach insurer first pays a deductible of 20% of its prior-year direct earned premium; the government then pays 80% of losses above it.
- Annual capNeither the government nor insurers that met their deductibles pay insured losses above $100 billion in a year, and the offer must disclose that cap.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Property: addresses, building values and how each building is used.
- Current policies: declarations pages showing whether terrorism was taken or declined.
- Signed forms: any terrorism rejection you signed at the last renewal.
- Loan documents: the insurance section of your mortgage or loan agreement.
- Leases and contracts: insurance requirements tenants or clients place on you.
- Lines in force: property, liability, umbrella, D&O and workers' comp.
What the terrorism offer must show you
The terrorism offer on a commercial quote follows a set pattern because Treasury's rules in 31 CFR Part 50 make certain disclosures a condition for federal payments under the program. Here is what I look for:
- Two figures on a separate line. The premium charged for insured losses covered by the program and the federal share of compensation, shown as a separate line item in the policy at the time of offer and of renewal.
- Plain labeling. The insurer may state the terrorism premium as a portion or percentage of the policy premium only if that fits its standard business practice and it also states the total policy premium or how it is calculated. It may not describe it in a misleading way, such as calling it a "surcharge."
- Cap notice that carries through. The $100 billion annual cap must be disclosed, and the timing rule is met if that happens no later than the first formal offer of coverage or of renewal. If you buy the coverage, the insurer must clearly refer back to that disclosure, and to the final coverage terms, when the purchase is completed.
- Delivery through your broker. The insurer can send these notices through a producer or other intermediary but stays responsible for getting them to you.
If a renewal arrives without the terrorism line, I ask the insurer before you sign anything, on the commercial property and commercial umbrella layers alike.
The after-event surcharge on commercial policies
After the federal government pays its share of losses, the Act requires Treasury to recoup part of it through a "Federal terrorism policy surcharge" that insurers collect from policyholders and send to Treasury. 31 CFR Part 50, Subpart J sets the mechanics; the surcharge is not counted as premium.
- Who owes it. The policyholder. It is paid to the insurer with the premium on a property and casualty policy in effect during a Treasury-set assessment period.
- Which policies. Policies whose direct written premium is reported under commercial lines on the NAIC Annual Statement's Exhibit of Premiums and Losses (Statutory Page 14), or reported in an equivalent way.
- How it's applied. On a written-premium basis to policies that take effect or renew during the assessment period. New, renewal, mid-term and audit premiums for a policy term use the surcharge in effect on that term's effective date.
- How Treasury sets it. The factors include collecting 140 percent of any mandatory recoupment amount and a preferred initial assessment period of at least one full year.
- If it isn't paid. The insurer may use the same enforcement remedies available for unpaid premium.
- Refunds and fees. When unearned premium is returned, the surcharge on it is refunded too, and no fee or commission may be charged on the surcharge.
If Treasury ever sets one, I'll point it out on your bills and audit statements so it isn't mistaken for the terrorism premium on your quote.
Standalone terrorism policies: certified or not
Treasury's June 2026 report says program coverage is generally embedded in policies that also cover other risks. A standalone policy covers only terrorism and, per industry sources, is bought mainly by organizations insurers view as higher risk, when terrorism isn't available in the commercial property policy, costs too much there, or is too narrow.
There are two kinds:
- Certified standalone. Written subject to the program's terms and conditions. Treasury describes these as the standalone policies that provide TRIA coverage.
- Non-certified standalone. Covers terrorism-related losses as the policy itself defines them, whether or not the Secretary certifies the act. Losses insurers pay under these policies are not eligible for reimbursement under the program.
The market you're placed in matters too. In Treasury's 2025 take-up figures by policy count, 76 percent of policies across insurer categories included some terrorism coverage, but only 19 percent of policies from alien surplus lines insurers did. When a property quote comes from that market, I confirm whether terrorism is included and, if a standalone form is offered, which kind. See event venue, hotel and motel and active assailant coverage for related exposures.
Terrorism insurance, answered
What is TRIA?
The Terrorism Risk Insurance Act of 2002. It created the Terrorism Risk Insurance Program, which the Secretary of the Treasury runs with help from the Federal Insurance Office, to share insured losses from certified acts of terrorism with insurance companies. The 2019 reauthorization extended the program through December 31, 2027.
Do I have to buy terrorism coverage?
No. The insurance company has to offer it on new and renewal commercial property and casualty policies, but you can decline it. If you keep it, the premium charged for it has to be disclosed clearly and conspicuously. Check your loan agreement and any lease or contract that sets your insurance requirements before you decline.
What makes an act of terrorism 'certified'?
The Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Attorney General, has to certify it as a violent or dangerous act that caused damage in the United States (or to certain U.S. aircraft, vessels or missions abroad), committed to coerce the civilian population or influence government policy. No act can be certified if property and casualty losses are $5 million or less, and the decision isn't subject to judicial review.
Which policies does the program cover?
Commercial lines of property and casualty insurance, including excess insurance, workers' compensation and directors and officers liability. The law leaves out commercial auto, professional liability other than D&O, medical malpractice, surety, burglary and theft, federal crop, title, private mortgage insurance, NFIP flood, and health and life insurance.
Does terrorism coverage include nuclear, biological, chemical or radiological attacks?
The federal law doesn't expressly include or exclude them. The Insurance Information Institute notes that this coverage is often hard to find and expensive, and where a state permits those exclusions, insurers there don't have to offer it. The exclusions on the terrorism form itself decide it.
Does workers' comp cover terrorism?
Yes. Terrorism can't be excluded from workers' compensation policies in any state, and the war exception that keeps an act from being certified doesn't apply to workers' compensation coverage.
What happens after December 31, 2027?
Under current law the program terminates on that date unless Congress extends it again. When a policy term runs past that date, I read how its terrorism wording handles the end of the program before you renew.
Does TRIA cover cyber terrorism?
Treasury says its regulations and guidance confirm that commercial cyber insurance written in the program's eligible lines is subject to TRIP, and that the program can respond to cyber losses from a certified act of terrorism. Treasury adds that catastrophic cyber losses may be subject to exclusions, which can complicate how the program applies.
Do you offer terrorism insurance outside California?
Yes. Clients across the country send the same quote form. Sam Alishahi is licensed in all 50 states and Washington, DC and places policies there directly. The shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Official sources
- U.S. Treasury, Federal Insurance Office: Terrorism Risk Insurance Program
- Terrorism Risk Insurance Act of 2002, as amended (15 U.S.C. 6701 note)
- Insurance Information Institute: Background on terrorism risk and insurance
- U.S. Treasury, Federal Insurance Office: Report on the Effectiveness of the Terrorism Risk Insurance Program (June 2026)
- 31 CFR 50.10, General disclosure requirements (Cornell LII)
- 31 CFR 50.12, Clear and conspicuous disclosure (Cornell LII)
- 31 CFR 50.15, Cap disclosure (Cornell LII)
- 31 CFR 50.20, General mandatory availability requirements (Cornell LII)
- 31 CFR 50.21, Make available (Cornell LII)
- 31 CFR 50.22, Mandatory availability terms and limitations (Cornell LII)
- 31 CFR 50.92, Determination of Federal terrorism policy surcharge (Cornell LII)
- 31 CFR 50.94, Collection of Federal terrorism policy surcharge (Cornell LII)
Before you sign the rejection, send it to me.
The terrorism offer from your renewal and your current declarations pages are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.
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