Terrorism Liability

The financial losses and claims on companies following the terrorist attacks of September 11, 2001, led the United States to examine the role of terrorism risk insurance. RAND has researched and advised policymakers about terrorism risk management in general and, in particular, the Terrorism Risk Insurance Act (TRIA), a U.S. law designed to limit insurers’ financial losses following acts of terrorism, which has been extended twice and is now due to expire in 2014.

  • A man passes by the skyline of New York's Lower Manhattan and One World Trade Center as he walks through Liberty State Park in Jersey City, NJ


    RAND Research Influences Debate on Terrorism Insurance

    To inform the debate on whether the Terrorism Risk Insurance Act (TRIA) should be continued or allowed to expire, RAND prepared policy briefs on three topics of central concern to policymakers: national security perspectives, the impact on federal spending, and the impact on workers' compensation markets.

    Jun 19, 2014

  • Periodical


    Beyond the Shadow of 9/11

    The 10th anniversary of the 9/11 terrorist attacks warrants a thoughtful review of America's progress and future strategy. In this RAND Review cover story, RAND experts offer perspectives on Afghan-led solutions, ways to counter al Qaeda, air passenger security, and compensation for those affected by terrorism.

    Sep 1, 2011

  • News Release

    News Release

    Taxpayers, Policyholders Benefit from Terrorism Risk Insurance Program

    Taxpayers save money and businesses are better protected with the Terrorism Risk Insurance Act (TRIA) in place than if the act is allowed to expire.

    Oct 10, 2007

  • Visitors to the 911 Memorial plaza peer through glass windows into the 911 Memorial Museum at the World Trade Center site in New York


    Taxpayers, Policyholders Benefit from Terrorism Risk Insurance Program

    Taxpayers save money and businesses are better protected with the Terrorism Risk Insurance Act (TRIA) in place than if the act is allowed to expire. TRIA allows the insurance industry to play a larger role in compensating losses caused by smaller terrorist attacks by transferring some of the risk for the largest attack to the government.

    Sep 25, 2007

  • Report


    Should the Terrorism Risk Insurance Act of 2002 Be Extended?

    Interim findings from a RAND Center for Terrorism Risk Management Policy project suggest that the Terrorism Risk Insurance Act performs well on outcomes examined for conventional attacks but not for chemical, biological, radiological, or nuclear ones.

    May 28, 2007

  • Research Brief

    Research Brief

    Terrorist Insurance and the Evolving Terrorism Threat

    How does the Terrorism Risk Insurance Act (TRIA) align with the evolving terrorism threat? Transnational and domestic terrorism trends reveal that TRIA does not provide adequate financial protection, particularly in the face of economically motivated...

    Nov 25, 2005

  • Two firefighters holding a hose and surrounded by smoke


    Terrorism Risk Insurance Act Effective at Sharing Financial Risk

    The Terrorism Risk Insurance Act (TRIA) creates an effective mechanism for sharing the financial risk that businesses face from terrorism. Still, less than half of all businesses have terrorism insurance; the U.S. government should consider encouraging these businesses to buy coverage.

    Oct 6, 2005

  • The World Trade Center site at Ground Zero, debris and vehicles seen spread around the area already 2 weeks after the September 11, 2001 disaster. Fires are still burning underground and smoke and haze fills the sky


    U.S. Terrorism Insurance System Falling Short

    The terrorism insurance system in the United States is failing to provide businesses with adequate financial protection, leaving the nation vulnerable to economic disruption if there is a major terrorist attack.

    Jun 16, 2005

  • Report


    Issues and Options for Government Intervention in the Market for Terrorism Insurance

    Examines the central issues in the debate over whether to extend, modify, or end the Terrorism Risk Insurance Act of 2002, which requires insurers to make terrorism coverage available to commercial policyholders

    Dec 20, 2004

  • Research Brief

    Research Brief

    Assessing the Effectiveness of the Terrorism Risk Insurance Act

    This study simulates the expected losses from three modes of terrorist attacks and shows how the Terrorism Risk Insurance Act (TRIA) would distribute the resulting losses.

    Jan 1, 2004

  • Journal Article

    Journal Article

    Terrorism Insurance Policy and the Public Good

    Difficulties involved with assessing and pricing terrorism risk are similar to those associated with assessing and pricing natural disaster risk.

    Jan 1, 2004

  • Journal Article

    Journal Article

    Insurance, Self-Protection, and the Economics of Terrorism

    Investigates the rationale for government intervention in the market for terrorism insurance, focusing on the externalities associated with self-protection.

    Jan 1, 2002

  • Content


    Lloyd Dixon

    Director, RAND Kenneth R. Feinberg Center for Catastrophic Risk Management and Compensation; Senior Economist; Professor of Policy Analysis Pardee RAND Graduate School
    Education Ph.D. in economics, University of California, Berkeley; B.S. in general engineering, Stanford University; B.A. in political science, Stanford University