Terrorism insurance take-up in the US improved to 61% last year from 59% in 2014 after Congress extended the Terrorism Risk Insurance Act (TRIA), according to Marsh.

President Barack Obama signed the six-year extension into law on January 12 last year, taking the terrorism insurance backstop through to December 31 2020.

“The passage… brought greater certainty to organisations in the US that depend on terrorism coverage, and terrorism insurance take-up rates for [TRIA] coverage increased [last year],” Marsh says in this year’s Terrorism Risk Insurance Report.

“Most companies that purchased terrorism insurance in the past still do so as insurers continue to underwrite the risk with the support of [TRIA].”

Take-up is measured as the percentage of companies buying property terrorism insurance.

TRIA expired on December 31 2014 when Congress failed to agree new laws to extend it.

The program was established following the September 2001 terror attacks, which made terrorism cover very expensive or unavailable.

The Marsh report, which concentrates on the US, says the northeast has the highest take-up rate of property terrorism cover, at 72%. This is due to the region’s large concentration of metropolitan areas, such as New York and Washington.

The report says business disruption cover has become more important as terrorists increasingly take on so-called soft targets.

“While terrorism [attacks] in the 1990s and 2000s were typically perpetrated by groups targeting high-value targets, recent attacks often have been carried out by small cells or lone attackers seeking maximum casualties
in crowded spaces,” Marsh says.

“The potential cost of property damage from a ‘small’ attack can be outweighed by business disruption costs.”

Examples of terror-related business disruptions include the Brussels airport bombing, which affected airlines, hotels and travel websites.