President Bush has signed legislation that guarantees insurance companies $100bn (£64bn) cover in the event of a future terrorist attack.

The measure guarantees federal funds for insurance companies in the three years after any attack.

The September 11 attacks cost as much as $50bn (£32bn) in insurance claims, prompting insurance companies to stop offering terrorism coverage in new policies.

However the new law requires insurance companies to offer terrorism coverage.

Under the new law, the government could aid terrorism-related claims that surpass $5million (£3.2m). Insurance companies would pay deductibles ranging from 7% to 15% of the previous premiums.

The federal government would then cover 90 percent of everything above the deductible with the companies paying the other 10 percent.

Bush told the New York Times: "Today we're taking action to strengthen America's economy. Should terrorists strike again, we have a system in place to address financial losses and get our economy back on its feet as quickly as possible."

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