Final Report of the War Zones Task Force
The War Risk Exclusion in the General Exclusions section of our standard policy language reads as follows:
"Declared or undeclared war, or any act of declared or undeclared war".
The reason for this exclusion is that our standard rates do not contemplate the additional hazard for exposure due to war or any act thereof.
It is commonly thought that a war exclusion means that any loss incurred in a war zone, or better defined as an area where "war is going on" would not be covered by the contract. This is not correct; the war risk exclusion pertains only to losses caused by war or any act of war.
The term "war" can be defined as follows:
War is a hostile contention caused by or between nations or states, or parties in the same nation or state, exercising at least de facto authority (in reality or fact, actually exercising power according to the law) within a given territory and commanding an armed force.
Act of War is an incident directed or carried out by a member or members of an armed force in the prosecution of war.
Whether or not a war or act of war exists must be determined separately in each situation.
Individual acts of terrorism will not be considered in and of themselves as an act of war. Certainly, if a traveler in the Middle East becomes a victim of an unexpected and unforeseeable act of terrorism, even though it might be an act of action of one of the organized radical terrorists, such a death or loss would not be considered as caused by act of war. However, if an individual does knowingly travel into an area of combat where various organized groups are throwing bullets and shells at one another and as a result of these hostilities (which are acts of war) a loss occurs, it could very well be that the exclusion might be applied.
It is the degree to which these basic elements are present that determines whether or not a particular situation is a war or an act of war since there is obviously no way to evaluate the important circumstances of a loss before it happens; it is impossible to predetermine if coverage would apply to a hypothetical loss situation. However, following examples may aid in understanding purposes of the exclusions.
If a force of 1,000 plus men organized for the purpose of challenging an existing governmental authority through force, which exercises de facto authority over a reasonably substantial area and against which the existing government's authority must marshal its armed forces, it would be considered an act of war.
On the other hand, a group of 10 or 15 people spontaneously seizing a city block or rioting in a battle against local police or armed forces would probably not be considered an act of war. Likewise, aircraft being blown up by individual acts of terrorism would not necessarily be acts of war, nor would an accident causing loss when such accident, even in a war zone, was caused by forces entirely separate and apart from the actual act of war.
It is possible to amend the policy so that War Risk coverage can be provided everywhere EXCEPT the United States and the insured person's country of permanent residence. The cost is based on a number of factors, including but not limited to: the insured person's location within the country; the occupation of the insured (a reporter is a much poorer risk than an office worker); what type of air transportation will be used by the people to be insured; the length of time coverage is desired and the amount of indemnity; the transportation facilities for getting out of a "hot spot".
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