The federal backstop supporting the US terrorism insurance market appears likely to survive beyond 2027, but the program's long record of stability may be making it easier for businesses to overlook gaps in their own coverage.
The House of Representatives passed the TRIA Program Reauthorization Act of 2026 by a 373-15 vote in June. The legislation would extend the Terrorism Risk Insurance Program through 2034, raise the minimum loss required for an event to be certified from $5 million to $10 million beginning in 2029, and establish notification requirements during the certification process. A separate Senate bill, S. 4395, would extend the program to the same 2034 date without the certification changes.
Although the current authorization does not expire until December 31, 2027, early action matters to brokers placing coverage for commercial property owners, construction projects, major venues and other clients whose financing agreements may require terrorism insurance.
"Uncertainty around reauthorization could prompt insurers to pull back terrorism coverage, raise prices or add restrictive exclusions," said Mark Friedlander, senior director of media relations at the Insurance Information Institute (Triple-I). "This could jeopardize financing for real estate, construction and major venues since lenders typically require terrorism coverage as a condition of underwriting."
TRIA requires insurers to make terrorism coverage available in eligible commercial property and casualty lines. Following a certified event, insurers pay claims subject to their policy terms before seeking partial federal reimbursement once statutory thresholds and individual insurer deductibles have been met.
The program was created after insurers and reinsurers withdrew terrorism capacity following the September 11 attacks. Those attacks produced about $59 billion in insured losses in 2024 dollars across all lines, according to Triple-I, while the subsequent coverage contraction disrupted lending and development.
"After 9/11, insurers excluded terrorism risk almost overnight, freezing lending and construction nationwide," Friedlander said. "This showed how quickly private markets can't absorb catastrophic, hard-to-predict terrorism losses alone, and underscores why a stable, long-term federal backstop remains critical to economic continuity."
Terrorism insurance is now broadly available, with estimated take-up ranging from approximately 60% to nearly 80%, depending on the measurement used. That coverage is written within a large commercial base: premiums across all TRIA-eligible lines totaled $314.1 billion in 2024, and 30% to 35% of terrorism coverage was included within broader policies without a separate charge. Terrorism premiums themselves are a small fraction of that figure, with Treasury estimating insurers collected $68.3 billion in terrorism premiums between 2003 and 2023.
However, the availability of coverage does not establish whether an individual business has purchased it, selected adequate limits or fully understood the applicable exclusions.
"Since no TRIA claims have ever been paid, some businesses may assume the risk is remote or already fully covered," Friedlander said. "In reality, terrorism coverage often requires separate purchase, and many companies may be underinsured or unaware of their actual exposure."
That distinction gives brokers a reason to revisit how terrorism protection operates across clients' property, business interruption, workers' compensation and liability programs.
Coverage may also need to be examined alongside lender requirements, geographic concentrations, high-profile locations and dependencies on critical infrastructure.
The federal backstop applies only when an event is officially certified and the relevant loss thresholds are met. It also does not replace the underlying insurance contract: if a peril is excluded from the private policy, TRIA does not independently create coverage.
The risk landscape has expanded beyond the large, coordinated physical attack around which much of the original market response was built. Domestic terrorism, lone actors, cyber-enabled disruption and attacks on infrastructure can generate losses across several policies and locations.
"Threats have diversified – from large-scale attacks to cyberterrorism, lone-actor violence and infrastructure targeting – making risk harder to model," Friedlander said. "Despite growing private reinsurance capacity, the commercial market still relies on TRIA as the backstop for catastrophic, hard-to-price terrorism losses insurers alone can't absorb."
Cyberterrorism presents a particularly difficult test. Treasury guidance includes cyber liability among the property and casualty lines eligible for the program, but a cyberattack must still satisfy TRIA's other requirements. Questions may also arise over attribution, certification and whether the incident meets the statutory definition of terrorism.
Nuclear, biological, chemical and radiological events pose another potential mismatch. These attacks could produce some of the largest losses, yet exclusions in the underlying commercial policies may restrict the amount of insurance that ultimately qualifies for federal loss sharing.
"Private capacity has grown, but catastrophic terrorism losses – especially from nuclear, biological, chemical or large-scale cyber events – remain largely uninsurable without federal government support," Friedlander said. "Triple-I expects TRIA, or a similar federal backstop, to remain necessary for the foreseeable future."
