TRIP and Private Terrorism Coverage: A Natural Co-Existence

The state of global and domestic affairs has brought terrorism and political violence risk back into sharper focus. What is less clear is an accurate understanding of terrorism insurance coverage. Many commercial insureds assume that because terrorism is referenced in their property policy – and because the Terrorism Risk Insurance Program (TRIP) exists as an option – their related exposure is adequately covered.

Under TRIP, an insurer is required to offer terrorism coverage which may either be accepted or rejected by the insured. However, even if accepted by the insured, coverage under TRIP is different than a traditional insurance policy: it is a federally supported backstop that only responds if a terrorism event meets specific criteria and is formally certified by the U.S. government. Without certification, coverage is not triggered.

For insurance brokers, this distinction matters. Clients may believe they are protected, only to discover after a loss that the event does not qualify for coverage under TRIP. In fact, to date, no event has ever been certified under TRIP or resulted in a paid claim.*

9/11 and the Creation of TRIP

After the Terrorism Risk Insurance Act (TRIA) of 2002 became law following the Sept. 11, 2001 attacks, the Terrorism Risk Insurance Program was created to stabilize insurance markets and ensure capacity for future large-scale terrorism losses.

Nearly a quarter century later, the terrorism risk environment is arguably different from that which TRIP was designed to address. Today, smaller-scale attacks, lone actors, politically motivated violence, and incidents targeting “soft” or crowded locations dominate the threat landscape. Despite this shift, many insureds continue to rely on a framework built for large-scale, coordinated events.

For this reason, it’s important that brokers help clients understand the limits of TRIP and the complementary role that private terrorism insurance coverage plays in ensuring adequate protection.

TRIP and the Current Terrorism Insurance Landscape

While the Terrorism Risk Insurance Program continues to perform an important role in risk management, it comes with structural limitations. Not only is certification required before coverage applies, but total insured losses must also exceed a minimum threshold. Coverage is limited to U.S. locations; international assets remain outside its scope. In addition, TRIP has a statutory expiration date and must be periodically renewed by Congress. Although the program is currently scheduled to run through the end of 2027, it has lapsed in the past, and renewal timelines are not guaranteed.

 As of February 2026, lawmakers are considering H.R. 7128, the TRIA Program Reauthorization Act, which would extend TRIP from its current 2027 expiration through 2034. The proposed legislation also includes refinements to the program, such as potentially increasing the financial loss threshold for qualifying events from $5 million to $10 million for events in 2029 or later, establishing defined public notice timelines, and imposing a 90-day maximum certification period once a formal review begins.

These developments are meaningful and reinforce the importance of TRIP to both the insurance industry and policyholders. At the same time, they underscore a key reality: even with reform, TRIP remains dependent on certification, thresholds, and periodic reauthorization by Congress. For insureds with multi-year construction projects or long-term property portfolios extending beyond current expiration dates, the potential expiration and reauthorization process may pose a risk.

Where TRIP Falls Short: The Current Terrorism Risk Environment

While large-scale, coordinated attacks remain a valid concern, many modern terrorist activities lie outside the specific risk environment that TRIP was designed to address. Smaller attacks, lone-actor incidents, and politically motivated violence can cause significant physical damage, business interruption, and indirect losses without ever meeting certification requirements.

Insureds may also suffer losses without being the direct target of a terrorism or political violence event. Government-mandated closures, access restrictions, and supply chain disruptions can result in substantial financial impact. These exposures are particularly relevant for construction projects and complex property portfolios, for which delays and downtime can be as costly as physical damage. TRIP may not address these scenarios, especially when certification is uncertain or delayed.

Standalone Terrorism Insurance: Providing Continuity and Certainty

Private, standalone terrorism insurance is designed to address these gaps in coverage under TRIP. Unlike TRIP-backed coverage, standalone terrorism policies respond based on clearly defined policy terms without government action. If an event meets the policy’s definition of terrorism or political violence, coverage may apply without the need for certification.

Standalone terrorism solutions can also offer broader geographic reach, including international exposures, and are typically underwritten based on actual terrorism risk – rather than the more formulaic percentage of a client’s all-risk premium as is typically how TRIP premiums are calculated. Depending on the terms and conditions of stand-alone terrorism policies, coverage may include property damage, business interruption, contingent business interruption, and construction risk, providing continuity irrespective of TRIP’s coverage, expiration and reauthorization cycles.

Specifically, standalone policies are neither tied to TRIP expiration or reauthorization timelines, nor the length of time TRIP recovery payments may take, which may offer insureds greater certainty over the life of their risk management programs. Cost is often part of the discussion, but exposure-based pricing can be more efficient than clients expect, particularly when compared to the potential financial impact of an uncovered loss.

Resilience for a Risky World

By understanding TRIP’s role, its limitations, and the value of standalone terrorism coverage, brokers can help clients build resilient risk programs even as the threat environment and government policy continue to change.

TRIP will remain an important part of the insurance landscape, and its continued evolution is critical for the industry. But reliance on TRIP and its limitations, including certification and reauthorization, introduces uncertainty.

Brokers play a vital role in helping clients understand their risk exposure portrait. With regard to terrorism and political violence events, this translates to clarifying how terrorism coverage actually works, where gaps may exist, and how TRIP and standalone terrorism insurance can co-exist to ensure financial resolve. &

*  The Reauthorization of the Terrorism Risk Insurance Act of 2002 | Congress.gov | Library of Congress