War exclusion clause
A war exclusion clause or hostile acts exclusion is a common clause in insurance policies which excludes damage arising from a warlike act between sovereign or quasi-sovereign entities.[1][2][3] Insurance companies typically won't cover damages caused by war because such an event could cause damage that would be likely to bankrupt them if they had to cover it.
- Example: You are not insured for: war, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom or any hostile act by or against a belligerent power, capture, seizure, arrest, restraint or detainment (piracy excepted), and the consequences thereof or any attempt thereat, derelict mines, torpedoes, bombs or other derelict weapons of war[4]
Companies and individuals faced with a significant risk of war, such as companies located in politically unstable countries, may be able to purchase a separate war risk insurance policy.[5]
In the US, the Terrorism Risk Insurance Act provides a "backstop" for insurance claims related to acts of terrorism.
Issues
There are a number of possible points of contention with such a clause - in particular whether certain acts of terrorism or cyberattacks are covered.[5][6]
References
- Massmann, Susan (30 September 2001). "War Risk Exclusion Legal History Outlined". Property Casualty 360. Retrieved 25 April 2019.
- Menapace, Michael (10 March 2019). "Losses From Malware May Not Be Covered Due To Your Policy's Hostile Acts Exclusion". The National Law Review. Retrieved 25 April 2019.
- Stock, Rob (19 March 2019). "Insurers waive terrorism exclusions for Christchurch shooting victims". Stuff. Retrieved 25 April 2019.
- "Policy Terms, Conditions and Exclusions" (PDF). Transit NZ. Retrieved 25 April 2019.
- Kagan, Julia. "War Exclusion Clause". Investopedia. Retrieved 25 April 2019.
- Field, Matt (18 April 2019). "Is cyberwarfare war? Insurers balk at paying for some cyberattacks". Bulletin of the Atomic Scientists. Retrieved 25 April 2019.