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Insurers to Cut Coverage for Terror Losses

LOS ANGELES-Several commercial insurers will cut coverage for losses caused by acts of terror, allowing 2001 policies to go unrenewed for 2002, according to Standard & Poor's. The withdrawal from the market will spread beyond property and aviation insurance to include other risks.

By Peter Landau | Updated on January 12, 2002

LOS ANGELES-Several commercial insurers will cut coverage for losses caused by acts of terror, allowing 2001 policies to go unrenewed for 2002, according to Standard & Poor’s.

The withdrawal from the market will spread beyond property and aviation insurance to include other risks, such as employees’ workers’ compensation coverage rather than assume terror risks implicitly.

Though it hasn’t yet, Congress may pass legislation that would help to cap losses to the industry caused by terrorism, says Don Watson, a managing director with Standard & Poor’s Insurance Ratings group. But many insurers will not want to provide significant coverage for terror losses, regardless of government action.

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