WAR AND CIVIL WAR EXCLUSION CLAUSE

Risks : VAR

 

Notwithstanding anything to the contrary contained herein this Policy does not cover Loss or Damage directly or indirectly occasioned by, happening through or in consequence of war, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation or nationalisation or requisition or destruction of or damage to property by or under the order of any government or public or local authority.

N.M.A. 464

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What is ‘War Exclusion Clause’
A war exclusion clause in an insurance policy specifically excludes coverage for acts of war such as invasion, insurrection, revolution, military coup and terrorism. A war exclusion clause in an insurance contract refers to protection for an insurer who will not be obligated to pay for losses caused by war-related events. Insurance companies commonly exclude coverage perils on which they cannot afford to pay claims.

War Exclusion Clause History
The war exclusion clause became a hot issue in the insurance industry following the September 11, 2001, terrorist attacks on New York City and Washington D.C. Before the attacks, most war exclusion clauses applied only with respect to contractually assumed liability, on the theory that private persons and organizations could not otherwise incur liability in connection with war. However, after September 11, “war and terrorism” exclusions that broadened the war portion of the exclusion beyond contractually assumed liability were quickly added to liability policies. This development widened the scope of the war exclusion clause, which is now considered standard, regardless of whether terrorism is insured or excluded in the policy.

Two primary factors require the modern version of the war exclusion: the inability of insurance companies to gauge premiums to cover the risk of war and the need for insurance companies to protect themselves against a catastrophic financial disaster that could result from war-level destruction. If private insurers were to assume the normal risks incident to military service in time of war under ordinary premium rates, they would likely go bankrupt.

Read more: War Exclusion Clause https://www.investopedia.com/terms/w/war-exclusion-clause.asp#ixzz5CsN8AYSb