If you’ve before now bought tickets for Super Bowl XLIX or are looking forward to watching it with your friends and family, you may be surprised to be taught that there is a possibility it might not be played. For now, the show will go on, but insurance companies and publicity experts, see a risk for this years Super Bowl to be Cancelled.
TRIA was signed into law in 2002 in the aftermath of the 9/11 terrorist attacks, establishing a risk-sharing partnership between the federal government and the insurance manufacturing that made terrorism insurance extensively available to U.S. businesses—among them, organizers of sporting events.
Without federal support, most insurers had been unwilling to offer coverage.
There is significant money at stake for the organizers of Super Bowl and for NBC (CMCSA), which will televise the game. No insurance, no game.
A bit of background on why insurers changed their view of terrorism coverage after 9/11 provides the pertinent context. Before 9/11, insurers included terrorism reporting in all profitable policies without charging for it since the risk was below their level of concern.
The absence of terrorism coverage halted large construction projects around the country because monetary institutions were concerned about the viability of their loans. Their fears resembled the anxiety that organizations such as FIFA and the NFL have with admiration to their own legal responsibility.
TRIA addresses the insurance contribute problem. Under the program, the federal government provides a financial back-up for insurers by covering a piece of insured losses above $27.5 billion, up to $100 billion, giving the insurance industry some confidence as to its maximum exposure.
By law, only insurance companies offering workers’ reimbursement insurance must include terrorism peril in their policies, whether or not TRIA is renewed. Competing bills now in Congress would extend TRIA for an extra five to seven years. Over the summer, S. 2244 passed in the Senate and H.R.4871 was passed by the House monetary Services Committee. The November elections put everything on hold.
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In our current Wharton Risk Center report, “TRIA After 2014,” we element the impact of both the House and Senate TRIA regeneration bills with respect to who will pay after a terrorist attack.
We urge the House and governing body to reconcile the differences in their bills before Christmas. Congress, you have the ball. Don’t mishandle it. We are looking forward to watching Super Bowl XLIX on Feb. 1.