Feds urged to help pay for terrorism claims
Industry analysts cite the increased use of chlorine-enhanced bombs and fuel-air explosives in Iraq, which the analysts view as a test laboratory for terrorism.
Bombs that disperse chlorine, nearly unknown before this year, have been used at least nine times in Iraq in 2007, according to Risk Management Solutions (RMS), a risk consultant to the insurance industry. At least 40 people have died and several hundred, including six U.S. soldiers, have suffered injuries after inhaling or being burned by exploded chlorine, according to figures kept by the British Broadcasting Corp.
Devices that produce an explosive charge by combining gasoline or propane with small amounts of air can produce 30 percent more damage than a comparably sized TNT bomb, says Andrew Coburn, catastrophe research specialist for RMS. Islamist terrorists attempted to ignite three such devices in central London and Scotland last month, Scottish police said in a news conference last month.
"There have been many interdicted attacks, and there will be more in the years ahead," Coburn says. "At some point, some will succeed."
The House of Representatives is scheduled to vote next month on a bill that for the first time would make the federal government help pay for large claims resulting from chemical, biological, radiological or nuclear terrorism. The bill, co-sponsored by House Financial Services Committee chairman Barney Frank, D-Mass., grants a 15-year extension to a 2002 federal terrorism insurance bill that expires Dec. 31.
Lloyd Dixon, senior economist at the RAND Corp. think tank, says insurers are responding to a heightened "threat environment" and fears of "extremely large losses" from a domestic terror attack.
In July, Homeland Security Secretary Michael Chertoff cited chlorine bombings in Iraq when urging about 3,000 American water-treatment facilities that use the gas to increase security.
RMS also cites the average of four potentially catastrophic plots foiled in the United States each year since 2001 as reasons for boosting their federal aid. A plan uncovered in June to blow up fuel tanks and pipelines at New York City's JFK Airport was among the most recent.
In an assessment distributed to clients this month, RMS noted that the number of people killed in the average terror attack has more than doubled, from nine in 2004 to 20 in the past year.
The bill that the House will vote on triggers government payments once damage or injury costs exceed $50 million. It was approved by the House Financial Services Committee this month by a 49-20 vote. It faces opposition from the Bush administration.
In a hearing on the House bill, Assistant Treasury Secretary David Nason argued that the "most efficient, lowest cost and most innovative methods of providing terrorism risk insurance will come from the private sector."
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