American International Group Inc. lifted limits on property claims tied to acts of terrorism to $1 billion as clients ask for more protection in larger cities.

The previous limit was $250 million, New York-based AIG said Wednesday in a statement. Protection can be purchased alone or as part of a larger, $2.5 billion property-insurance policy that provides coverage for a broader array of risks.

“Demand from our clients for better protection against this risk has been strong,” George Stratts, AIG’s president of property and specialty risks, said in the statement. The coverage is intended to “respond to terrorist attacks worldwide.”

Terrorist events have spurred demand for coverage for property damage, cyber attacks or injuries to employees, and about 60 percent of U.S. businesses buy policies against such risks, according to the Insurance Information Institute. Corporations can obtain terrorism insurance limits of more than $1 billion at Lloyd’s of London and National Fire & Marine Insurance Co., a division of Warren Buffett’s Berkshire Hathaway Inc., insurance broker Marsh & McLennan Cos. said in a July report.

AIG also offers cyber policies that can cover losses tied to data breach, property damage and bodily injury caused by an attack, according to Matt Gallagher, a spokesman for the company. That’s separate from the insurance covered by Wednesday’s announcement.

Government Backstop

The U.S. government provides a backstop for terrorism-related claims of more than $5 million, a protection that hasn’t been used in the 14 years it has existed, according to Marsh & McLennan’s report. Marsh & McLennan said that, typically, the contracts “can provide critical terrorism and political-violence coverage to clients’ operations outside the U.S.”

AIG increased commercial-property limits to $2.5 billion this year from the $1.5 billion that was available since 2012. The insurer has hired more than 600 engineers and last year invested in a project with Clemson University to increase analytics and risk engineering. The firm seeks to provide services to clients including environmental cleanups, crisis management and cyber coverage.

AIG, run by Chief Executive Officer Peter Hancock, acquired a stake last year in investigative firm K2 Intelligence to boost efforts combating cyber attacks and other crimes. K2 CEO Jeremy Kroll has in recent years hired former Federal Bureau of Investigation officials and ex-New York Police Department Commissioner Ray Kelly.