National Security and Private-Sector Risk Management for Terrorism

by Lloyd Dixon, Robert T. Reville

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Much of the discussion around Terrorism Risk Insurance Act (TRIA) has focused on the failure of the terrorism insurance markets, but this chapter argues that the connection between terrorism insurance and compensation policy and national security provides another rationale for public intervention in insurance markets. High take-up rates for terrorism insurance or other forms of compensation for terrorism losses can enhance economic resilience after an attack and encourage national cohesion and solidarity post-event. Doing so thwarts the aims of terrorists and, over the long run, may deter future attacks.

Reprinted with permission from Cambridge University Press from Seeds of Disaster, Roots of Response, Chapter 18, pp. 292-304. Edited by Philip Auerswald, Lewis M. Branscomb, Todd M. La Porte, Erwann Michel-Kerjan, Copyright © 2006 Cambridge University Press.

Originally published in: Seeds of Disaster, Roots of Response: How Private Action Can Reduce Public Vulnerability, Chapter 18, pp. 292-304, November 2006.

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