Terror insurance at issue

Tuesday, Oct. 1, 2002 | 9:41 a.m.

WASHINGTON -- President George W. Bush summoned lawmakers to the White House today to urge them to provide federal guarantee of terrorism insurance needed to jump-start stalled construction projects across the nation.

Lawmakers have to reconcile a House proposal to offer insurers loans for claims related to a future terrorism act over $10 billion with a Senate proposal that wouldn't require insurers to pay back the money. They're also trying to work out differences in legal liability and proposed limits on punitive damage claims in the bills passed by each chamber.

Terrorism insurance became difficult to obtain and premiums have soared to as high as 25 percent of the value of the insured asset since last year's terror attacks, risk managers and real estate developers say.

"The real estate economy is in terrible shape," said Douglas Durst, president of the Durst Organization, which has owned Manhattan office buildings since 1915. "The cost of insurance is like an additional tax."