U.S. President George W. Bush yesterday signed legislation to relieve insurers of much of the financial burden that a terrorist attack would cause — a move that, he has said, should provide an economic boost for beleaguered industries (see GSN, Oct. 4).

As a result of the legislation, “the nation’s hardhats will get back to work, being able to put food on the table for their families,” Bush said.  “We have a system in place to address financial losses and get our economy back on its feet as quickly as possible,” he added (Elisabeth Bumiller, New York Times, Nov. 27).

The three-year program could cost the United States up to $100 billion annually.  It obliges the government to pay 90 percent of damages above $10 billion, but not more than $100 billion each year, in the wake of a terrorist attack.  The Sept. 11 attacks caused an estimated $40 billion in damages said (Joseph Treaster, New York Times, Nov. 20).

Bush was instrumental in the bill’s passage, winning over Republican lawmakers who were concerned about language that allows terrorism victims to sue corporations, according to the New York Times.

Under the new legislation, commercial insurance companies also are required to offer terrorism insurance, something most firms withdrew after Sept. 11.  The bill does not regulate terrorism insurance premiums, which will probably be high, executives have said.

“The risk is still astronomical,” said Gary Karr, spokesman for the American Insurance Association.  “It’s going to be a very difficult challenge for companies to figure out the underwriting rules for this.  Terrorism is still an extremely difficult risk to predict,” he added (Bumiller, New York Times, Nov. 27).

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