The US Treasury Department will extend the “make available” provision of its Terrorism Risk Insurance Act (TRIA) through to the end of 2005. The TRIA was to expire at the end of this year, having been implemented in 2002 following the September 11 strikes. It promises insurers that the US Government will share the costs of losses from future terrorist attacks.

The “make available” provisions require that each insurer must make available, in all of its commercial property and casualty insurance policies, coverage for losses due to covered acts of terrorism that does not differ materially from the terms applicable to losses arising from events other than terrorism.

While terror cover hasn’t been a hot seller in the US market, leading broker Marsh says latest research indicates demand for terrorism coverage by businesses is rising again.

In the first quarter of this year, more than 44% of US businesses took out insurance to cover terrorism risk – the highest rate seen for this coverage since the TRIA came into effect.

The new demand appears to have been stimulated by falls in property insurance premiums. The Marsh research report says insurers are offering more affordable rates and many have expanded coverage to include risks outside the US.