War and Terrorism Clause (Business Travel Insurance)

Purpose

War and terrorism are accumulation risks that can be neither calculated statistically nor confined geographically. The clause protects the insurer against unlimited accumulation losses when many insured persons are affected by one event at the same time, and separates the cover from specialised war and terrorism policies. At the same time it is not intended to leave business travellers unprotected who, as bystanders, are caught up in an attack or the outbreak of a conflict – a need that distinguishes business travel insurance from classic property insurance.

Effect and limits

The basic rule is exclusion: under the ERV wording, events that are a consequence of warlike events or attributable to terrorism are not insured, subject to SOS protection and expressly included endorsements. The passive write-back operates in several stages. First, cover continues if the insured person demonstrably did not take part actively or by incitement. Second, on the outbreak of war a time limit applies – under the ERV wording cover lapses 48 hours after the outbreak of hostilities if Switzerland or a neighbouring country is involved or major powers wage war against each other; hijackings or emergency landings that have already occurred remain covered for up to one year. Third, travel to already known crisis zones is insurable only via an endorsement after risk assessment, with capital benefits then typically remaining excluded. Nuclear, chemical and biological weapons are usually excluded absolutely. The sanctions clause complements the clause for countries under embargo.

Negotiation and practice

Companies with travel to unstable regions should check the definition of war (declared and undeclared), the scope of the passive write-back for AD&D and medical expenses and the interaction with security evacuation; active travel risk management is a precondition for endorsements covering crisis zones.