|Bush at White House bill signing, as members of Congress and workers look on. (Photo courtesy of The White House)|
President Bush has signed legislation that provides a federal financial safety net for insurance companies that face large terrorism-related claims. Construction officials hope that the bill, signed on Nov. 26, will give a push to projects stalled because such insurance coverage has been unavailable or too costly.
At the White House bill signing ceremony, Bush said the new law, the Terrorism Risk Insurance Act, "will permit many construction projects to move forward.... Billions of dollars in investments will be more secure. The nation's hard hats will get back to work, being able to put food on the table for their families."
Among those at the bill signing were construction union leaders, including AFL-CIO Building and Construction Trades Dept. President Edward C. Sullivan. He seconded Bush's remarks, saying the legislation "provides the backstop we need to ensure that major construction projects delayed or canceled will move forward now and in the future. And construction workers can get back to work again."
Stephen E. Sandherr, the Associated General Contractors' chief executive officer, said the statute "has the potential to unlock $15.5 billion or more in construction spending that was slowed or canceled and jeopardized thousands of construction-related jobs."
Under the legislation, the Treasury would cover 90% of terrorism claims when an insurer's exposure exceeds 7% of its commercial premiums in 2003, 10% of premiums in 2004 and 15% in 2005. It caps total annual terrorism-related liability at $100 billion.
In addition, the federal assistance won't have to be repaid if industry-wide terrorism claims exceed $10 billion in 2003, $12.5 billion in 2004 and $15 billion in 2005. Below those thresholds, insurers would have to reimburse the Treasury through surcharges of up to 3% on their commercial premiums.