The Terrorism Risk Insurance Act of 2002 is set to expire on Dec. 31, 2005. In the event of a terrorist attack, the federal government will cover 90 percent of losses above a company's deductible, while insurers provide the remaining 10 percent.
Carole Bionda, national chairwoman of the Associated Builders and Contractors, has expressed her support for renewing the bill. In an editorial distributed to the trade press, Bionda explained why the bill is important.
"The passage of the TRIA in 2002 brought stability back to the construction marketplace. If the TRIA is allowed to expire, the lack of viable insurance options will severely impact the construction industry. Without an extension of this necessary coverage against new terrorist acts, banks will not lend to new construction projects and companies will be reluctant to invest, restricting the flow of financing for many projects and, more importantly, reducing the number of new jobs that these projects would create," Bionda wrote.
The Terrorism Insurance Backstop Extension Act of 2004 would extend the TRIA through 2007. The measure was approved earlier in the year by the U.S. House of Representatives' Financial Services Committee, and according to Bionda, the bill is also picking up support from construction trade organizations, including ABC.