The Risk and Insurance Management Society (RIMS) has backed New York City Council’s bid for a long-term extension to the Terrorism Risk Insurance Act (TRIA).

The US Congress passed the Act after the September 11 2001 attacks which forced insurers to withdraw from terrorism cover.

The legislation provides a government reinsurance backstop and requires business insurers to offer terrorism coverage, but it is due to expire at the end of next year.

A New York council committee has proposed a resolution calling on Congress to continue TRIA, with RIMS supplying supporting testimony.

RIMS board member Lori Seidenberg says a private market solution is not feasible because of the unpredictability of terrorism and “resulting inability to price and assess the risk”.

If TRIA expires insurance companies will again refuse to offer affordable terrorism coverage in high-risk areas, she says. Real estate is one of several industries that would be hit.

“The inability to secure sufficient insurance coverage for acts of terrorism could result in the inability to secure financing for future construction projects,” Ms Seidenberg said.

“Public and private transportation, schools and hospitals, special and sporting events and certain manufacturing processes face terrorism exposure and need adequate coverage as well.

“Without TRIA, these entities may not be able to adequately cover themselves against acts of terror, thus placing their individual entities, and communities as a whole, at risk of devastating financial losses if a terrorism event were to happen.”

The full city council is expected to act on the resolution in the coming weeks. Bills have already been introduced to Congress proposing extending TRIA for five or 10 years.