Another foundational concept is “insured loss.” Following a terrorist attack, an insurer is entitled to submit its payments for insured losses to the backstop for potential partial reimbursement by the US government.

An insured loss is any loss resulting from an act of terrorism covered by primary or excess property and casualty insurance issued by an insurer if the loss occurred:[1]

  • Within the United States;
  • To a US-flagged air carrier or vessel located outside of the United States; or
  • At the premises of a United States mission.

Therefore, the concept of “insured loss” can be broken down into four discrete components:

  • Loss resulting from an act of terrorism;
  • Coverage of the loss under property and casualty insurance;
  • Coverage provided by an insurer; and
  • Qualifying location of occurrence of loss.

Coverage of the loss under property and casualty insurance;• Coverage provided by an insurer; and• Qualifying location of occurrence of loss.

5.1 – Loss Resulting from Act of Terrorism

5.2 – Covered by Property and Casualty Insurance

5.3 – Coverage Issued by an Insurer

5.4 – Geographic Location of Loss

5.5 – Allocated Loss Adjustment Expense

5.6 – Exclusions from Insured Loss

5.7 – Policies, Processes and Controls


[1] Terrorism Risk Insurance Act, Sec. 102(5).