ISO Gratified by Insurance Regulators' Call for Approval of Terrorism Exclusions; Wording Free to Non-Customers

JERSEY CITY, N.J., Dec. 21, 2001 — Insurance Services Office, Inc. (ISO) said it is gratified that members of the National Association of Insurance Commissioners (NAIC) have agreed on ISO's wording of insurance policy exclusions for acts of terrorism for commercial property and commercial liability coverage.

ISO made its terrorism filing last month on behalf of 200 insurer groups that are participating customers. Recognizing the urgency of the situation insurers face, absent a federal mechanism to help pay terrorism claims, ISO will grant a limited license to use its exclusion language, at no charge, to insurance companies that do not participate with ISO for policy forms.

The NAIC announcement today follows Congress' failure to pass legislation that would help insurers handle future terrorism claims.

Estimates of insured losses from the September 11 attacks range from $30 billion to $70 billion. Insurers have said they will pay claims from September 11, but warn they might not financially survive another blow of that magnitude without help from the federal government and reinsurance. Reinsurers reportedly have declined to cover terrorism for all lines of insurance in new contracts with primary insurers.

ISO, an information company that serves the property/casualty industry, produces standardized policy contract language — forms and endorsements used widely throughout the industry to underwrite many lines and classes of insurance. Forms and endorsements that modify the terms of coverage are subject to state regulatory approval.

Last month, ISO filed endorsements insurers may use to exclude coverage for terrorism in their commercial property and liability forms in the 50 states, Guam, Puerto Rico, the U.S. Virgin Islands and Washington, D. C.

After consulting with insurance regulators, ISO subsequently amended its filing to narrow the application of the terrorism exclusion by establishing a $25 million threshold for insured damage from an incident of terrorism for the exclusion to take effect. The threshold does not apply in cases of terrorism using nuclear, chemical or biological materials. ISO's terrorism exclusion endorsement for liability coverage provides an additional threshold for serious physical injury to 50 or more persons. If either threshold is exceeded, the exclusion would be invoked and the policy would not provide coverage for any loss.

ISO filed its exclusions Nov. 8 in response to threats of future terrorist attacks, uncertainty about the outcome of federal legislation and a lack of reinsurance as of January 1, 2002.

Non-participating companies wishing to obtain the copyrighted wording of the ISO terrorism exclusions should contact the ISO customer service department at 1-800-888-4476, or contact ISO at

Release: Immediate

Giuseppe Barone / Erica Helton
MWW Group (for ISO)
201-507-9500 /

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