About the Center for Terrorism Risk Management Policy

The system for insurance, compensation and liability for injury, death, and economic loss in the United States was unprepared for the devastating losses of September 11, 2001. In addition, virtually overnight, public and private institutions were forced to make decisions about security acquisition without access to reliable and comprehensive information.

Although the government created a number of programs in the aftermath of the terrorist attacks—programs that limited the liability of certain cities and businesses, provided billions in direct compensation to many September 11 victims, and set up a "terrorism backstop" to stabilize insurance markets—policymakers were operating hastily in a period of national emergency and unprecedented risk.

What the nation needs at this juncture is high-quality analysis to improve public and private decisionmaking in this area. To meet this need, the RAND Center for Terrorism Risk Management Policy was established in 2002 to study terrorism risk management, insurance, liability, and compensation. The Center is a collaboration of three organizations:

• RAND Institute for Civil Justice, which brings a 25-year history of empirical research on liability and compensation (read About the ICJ).
• RAND Infrastructure, Safety and Environment, with the world’s foremost experts on terrorism and homeland security at RAND (read About ISE).
• Risk Management Solutions (RMS), the world's leading provider of models and services for catastrophe risk management (read About RMS).

The Center provides research that is needed to inform public and private decisionmakers on economic security in the face of the terrorism threat. Terrorism risk insurance studies will provide the backbone of data and analysis for appropriate choices with respect to the renewal of the Terrorism Risk Insurance Act (TRIA) in 2005. Research on the economics of different liability decisions will inform the policy decisions of Congress and the opinions of judges. Studies of compensation will help Congress ensure appropriate compensation to the victims of terrorist attacks. Research on security will help protect critical infrastructure and improve collective security in rational and cost-effective ways.

The fundamental principle underlying the Center's analytical approach is that compensation, liability, and risk insurance policy for terrorism must be firmly grounded in an empirical and rigorous understanding of terrorism itself. We therefore envision a multidisciplinary research approach that will draw on the expertise from all parts of RAND and from the extensive modeling expertise of Risk Management Solutions. In addition, since the goal of the research is to provide policy-relevant research, we plan to actively engage a broad range of stakeholders in the Center in order to facilitate practical and realistic recommendations and recognition of the institutional and legal context of the policies. Learn more about the Center's institutional resources and expertise and anticipated uses of the research.

About RAND

For more than 60 years, decisionmakers in the public and private sectors have turned to the RAND Corporation for objective analysis and effective solutions that address the challenges facing the nation and the world. These challenges include such critical social and economic issues as education, crime, and the environment, as well as a range of national security issues. Today, RAND researchers and analysts continue to be on the cutting edge of their fields, working with decisionmakers in both the public and private sectors to find solutions to today's difficult, sensitive, and important problems. Through its dedication to high-quality and objective research and analysis, and with sophisticated analytical tools developed over many years, RAND is engaged with its clients to create knowledge, insight, information, options, and solutions that will be both effective and enduring.

RAND's work on terrorism has been at the forefront of the policy debate for three decades. This research has investigated the origins and evolution of terrorism, collated the most comprehensive database of terrorist acts in the world, and examined alternative policy options to counter the threat of terrorism.