November 16, 2002—The House of Representatives has passed the much-debated Terrorism Insurance Bill that would provide $100 billion to help insurance companies fulfill claims in the event of a terrorist attack.
The issue of punitive damages—the liability of property owners in the event of such a disaster—was the stumbling block that prevented a consensus until now. House and Senate Republicans, as well as The White House, supported the ban, citing the crippling effect that a deluge of lawsuits would have on property owners, and the economy. However, the argument that terrorism insurance has become too difficult and too costly for commercial property owners to obtain won bipartisan support.
President Bush finally agreed to sign a bill without the liability provision, citing the potential threat to the U.S. economy of another terrorist strike. The House bill was passed with a measure to consolidate civil lawsuits in a single court in the state where the attack took place.
The bill would cover 90 percent of future terrorism-related insurance claims when terrorism-related losses exceed minimum levels of an insurance company’s premiums: 7 percent of premiums in the first year, 10 percent in the second year and 15 percent in the third year.
The bill now moves to the Senate where supporters hope it will pass before the adjournment of Congress.
