War and Terrorism 101
What Is War And Terrorism Insurance?
An insurance policy against War and Terrorism provides coverage for loss or damage occurring during acts of war and terrorism. As a type of political risk, insurance against War and Terrorism can provide businesses with peace of mind that they have financial protection against an unexpected violent political event or warlike activity.
Typical acts that could be categorised under War and Terrorism include:
- Riot, rebellion or civil unrest
- Invasion
- Insurrection
- Hijack
- Terrorist attack
- Illegal incarceration
- Confiscation
- Expropriation
- Deprivation
- Nationalization
- Political violence
- Currency inconvertibility
- Contract frustration
Who Needs Insurance Against War And Terrorism?
With the rise of terrorist attacks reported in the media, coverage against political violence is becoming more essential than ever. A terrorist attack can occur at any place at any time. Whether the terrorist attack occurs on a client’s premises or nearby, the wide-spreading damage and chaos can seriously disrupt the operations of a business as well as causing considerable damage to their property.
Companies who conduct business abroad, or who post employees in foreign countries with unstable political reputations would also benefit from insurance against War and Terrorism. This will address any exposure to loss faced by these companies as a result of governmental action, either foreign or domestic.
What Does Insurance Against War And Terrorism Cover?
Acts of War and Terrorism can not only cause damage and injury to those directly affected by an attack, but also cause a significant Business Interruption. Typical areas covered by War and Terrorism insurance include:
- Damage to commercial property (eg office buildings, factories, shopping malls and apartment buildings)
- Business interruption
- Workers compensation
- Bodily injury
What Is Not Included In War And Terrorism Insurance?
Many insurance policies have warlike activities or acts of terrorism excluded as standard. Despite there being specific insurance products to include War and Terrorism, there are still grey areas and areas that remain excluded:
- Nuclear, biological, chemical and radiological (NBCR) events
- Certain declarations of war
Ensure that all wording is read carefully as many insurance policies maintain that damage from acts of war are fundamentally uninsurable. Therefore coverage can only be provided for certain areas of civil commotion or political instability.
Also losses incurred due to threats of terrorism may not be included, only losses from an actual terrorist attack.
How Much Does War and Terrorism Insurance Cost?
The cost of coverage for War and Terrorism will be determined from the following:
- Location of the company
- Size of the company
- Value of the company
- Estimated cost of repairs