The lame-duck Senate gave President Bush two more victories last night, voting overwhelmingly for an administration-backed bill to help the insurance industry cover the cost of claims from future terrorist attacks and confirming one of Bush's most controversial appellate court nominees.

By an 86 to 11 vote, the Senate gave final passage to the terrorism insurance bill, sending it to the president for his signature. The measure will provide as much as $100 billion to cover terrorism-related claims, and Bush made it a high priority during the closing weeks of the midterm election campaign.

The Senate also voted, 55 to 44, to confirm the nomination of U.S. District Judge Dennis W. Shedd to the U.S. Court of Appeals for the 4th Circuit in Richmond. Shedd, a former aide to retiring Sen. Strom Thurmond (R-S.C.), was strongly opposed by civil rights and other advocacy groups. His nomination became a focal point in the continuing battle between the Bush administration and its critics over the shape of the federal judiciary.

Just before last night's vote, the frail, 99-year-old Thurmond rose at his desk on the Senate floor to praise Shedd as "a man of great character" who would "uphold the rights of all people under the Constitution." Thurmond's brief statement prompted an unusual round of applause from Senate colleagues.

Although final passage of the terrorism insurance bill was a victory for Bush, it required him to agree to a compromise that angered some House leaders of his own party. As initially passed by the House, the measure included a provision that would have prohibited victims of terrorist attacks from seeking punitive damages in lawsuits against companies, real estate owners and others.

Juries sometimes award punitive damages, on top of damages for actual losses or pain or suffering, against a company, manufacturer or other party deemed to have recklessly caused injuries or death. Republicans have long sought to curb punitive damages, in part as a way to strike back at trial lawyers, who generally support the Democrats.

The White House supported the punitive damages ban, but the Senate did not include that provision in its bill. In negotiations, the White House backed down from its earlier support of the ban in order to produce compromise legislation. That angered House GOP leaders, who delayed consideration of the compromise measure until last week.

In its final form as approved by the Senate last night, the bill will provide as much as $100 billion over three years to cover 90 percent of future terrorism-related insurance claims. Government aid would kick in if terrorism-related losses exceed minimum levels of an insurance company's premiums. The threshold levels to qualify for the aid will be 7 percent of premiums in the first year, 10 percent in the second year and 15 percent in the third year.

The measure will also consolidate civil lawsuits stemming from a terrorist attack in a single federal court for trial under the laws of the state in which the attack took place. That provision was designed to prevent defendants such as property owners and insurance companies from facing multiple claims in several jurisdictions from the same event.

Supporters of the bill maintained it was a vital step in reviving the economy. They said skyrocketing premiums and a decline in the availability of terrorism insurance since last year's terrorist attacks had crippled numerous planned major developments and other construction projects.

"Given that this measure relates to possible future terrorist attacks, we can only hope it's never needed. But it's a critically important safety net if the threat arises," said Sen. Christopher J. Dodd (D-Conn.), who was a sponsor of the bill and helped shepherd it through.

Gary Karr, a spokesman for the American Insurance Association, an industry group that lobbied hard for the bill, said it will take some time for the bill to affect the insurance market.

"This bill is essential for the economy," Karr said. "Once the re-insurers left the marketplace and insurers couldn't underwrite this risk, the risk had to go somewhere, and the risk went on . . . businesses."

Shedd's nomination was one of the most contentious to be considered during the 107th Congress. The 4th Circuit, which hears appeals of cases from Maryland, Virginia, West Virginia, North Carolina and South Carolina, is already considered one of the most conservative appellate courts in the country. Shedd's nomination attracted widespread opposition from both national and local civil rights groups, as well as elected officials, legal organizations and lawyers from the region covered by the circuit.

With Democrats in control of the Senate, the nomination appeared stalled. But with the Republican gains in the Nov. 5 general election, ensuring a GOP takeover of the Senate next year, the Democratic opposition crumbled.

By voice votes last week, the Senate Judiciary Committee cleared the nomination of Shedd and the nomination of another conservative, University of Utah Law School professor Michael McConnell, to the Denver-based U.S. Court of Appeals for the 10th Circuit. The full Senate confirmed McConnell's nomination by voice vote last Friday.

Staff writer Jackie Spinner contributed to this report.

Sen. Fred Thompson (R-Tenn.), left, talks with Nicholas Calio, right, President Bush's legislative affairs chief, and Ziad Ojakli, Bush's liaison to the Senate.