In the immediate aftermath of September 11, insurers began to reassess the risks posed by terrorism. For the remainder of 2001 and for much of 2002, terrorism coverage was scarce and the immediate response by the insurance industry was to narrow the scope of coverage and increase premiums. The increased cost is not just in the form of higher premiums but at higher deductibles. For similar reasons, Re-insurers were unwilling to reinsure policies with exposure to areas perceived to be vulnerable to attack. Obtaining reinsurance for high-risk facilities became difficult.

The availability of affordable terrorism insurance is deemed by many to be an important instrument for financial protection in many key sectors of the economy. Therefore, analyzing the situation of 2001, NICL decided to provide some reasonable compensation to the Public Sector clients and offered Terrorism Insurance Cover in Fire Policies as per following product