Domestic Terrorism and the Insurance Gap: Why TRIA May Not Be Enough
Domestic terrorism, while recognized as a serious and growing threat by federal authorities, is not designated as a standalone federal crime in the United States. As a result, individuals accused of politically motivated violence or mass attacks within the U.S. are often prosecuted under alternative criminal statutes such as weapons charges, conspiracy, hate crimes or assault rather than terrorism-specific charges. Unlike international terrorism, which is addressed under federal anti-terrorism laws, domestic terrorism lacks a corresponding criminal offense, creating both legal and insurance-related challenges.
This legal distinction has significant implications for insurance coverage.
Under the Terrorism Risk Insurance Act (TRIA), for coverage to apply, the federal government must formally certify an event as an act of terrorism. TRIA only applies to acts that are foreign in origin and meet certain damage thresholds. Domestic terrorism, by definition, falls outside of these parameters, meaning TRIA does not respond in many of the most common modern-day terrorism scenarios.
At the same time, insurers are increasingly limiting or excluding coverage for assault and battery (A&B) exposures due to a rise in both the frequency and severity of such claims, including large settlements and nuclear verdicts. This trend poses a dual threat to insureds: a domestic terrorism or active assailant event may not be eligible for TRIA backing, and general liability policies may also exclude the incident under A&B exclusions, leaving clients significantly exposed.
Standalone terrorism or political violence policies offer a potential solution. These policies differ from TRIA in key ways: they typically do not distinguish between domestic and international terrorism and do not require government certification to trigger coverage. While some insurers have previously paid domestic terrorism claims due to public pressure or reputational risk, the increasingly litigious environment makes continued exceptions less likely. As a result, reliance on carrier discretion is no longer a safe risk management strategy.
Coverage under these standalone policies is highly customizable and can include protection for events such as riots, civil commotion, insurrection and active assailant attacks, many of which are specifically excluded under standard TRIA-backed or general liability programs.
Why does this matter?
Being aware of potential gaps in your clients’ insurance programs is critical, especially for those with high public visibility or operations in sectors more likely to be targeted by domestic terrorism, riots or active assailant events. Failing to address these exposures can leave businesses financially vulnerable in the wake of an incident. Fortunately, solutions are available in the domestic, London and Bermuda markets, offering a range of coverages to address evolving threats.
How Alliant Can Help
Alliant works closely with domestic and international carriers to design tailored political violence and terrorism insurance solutions that go beyond TRIA. Our team helps assess vulnerabilities, identify policy exclusions and secure comprehensive protection for today’s dynamic threat landscape. Contact your Alliant representative to learn how we can help close the gaps in your coverage.