On Tuesday, the U.S. Senate passed the Terrorism Risk Insurance Act of 2002 by an 84 to 14 vote. Under the provisions of the bill, S. 2600, the federal government would reimburse businesses for 90% of losses after the first $10 billion in damages from terrorism acts.
The House passed a similar bill last November, and now the two bills must be reconciled in a committee.
Passage of the bill follows an intense lobbying effort that included the commercial real estate industry. A group of 87 real estate executives recently sent a letter to Senate leaders Tom Daschle, (D-S.D.) and Trent Lott, (R-Miss.), warning that, without federal assistance for terrorism insurance, many office buildings, hotels and malls can’t be sold and new projects won’t be started.
According to a recent report by New York-based Jones Lang LaSalle, owners are paying anywhere from 40% to 500% more for terrorism insurance — depending on the perceived risk of the property — than before the Sept. 11 terrorist attacks.