Large employers located in certain cities or in certain industries may find workers' compensation insurance harder to land and, when they do, at a higher price, according to Marsh Inc.
Marsh asserts that the reduced capacity could grow as the Terrorism Risk Insurance Program Reauthorization Act of 2007 comes to its 2014 expiration date, and the impact is already evident as carriers have reduced the insurance capacity for employers in those high-risk cities or industries.
Carriers have commonly watched workers' compensation exposure to determine the potential impact that, say, an earthquake would have on an employer's book of business. California, in particular, often saw this practice, though that changed after the 9/11 attacks. Workers' compensation carriers and reinsurers started to focus on employee concentrations in large cities that were identified as high-risk targets for terrorist attacks.
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