No insurance coverage for war damage

THE EDITOR: The ongoing imbroglio between the US and Venezuela seems to be heading towards land intervention by the US and can lead to an all-out war. The spill-off of a war is likely to affect TT directly and indirectly, according to experts and people in the know. Direct damage to our assets, increased migration inflows, negative impacts on our economy, and supply-chain challenges are some of the inevitable outcomes being envisaged.

There is one other consequence that can seriously impact TT, ie, insurance policies (apart from certain marine insurance policies) do not cover damage to insured property resulting from war and related risks. The typical exclusion on a property policy reads:

“The insurer shall not be liable in respect of any loss, accident, damage, expense or liability occasioned by, or through, or in consequence, directly or indirectly, of war, invasion, act of foreign enemy, hostilities or warlike operations (whether war be declared or not), or civil war.”

This means that both direct and indirect losses will be excluded, and policyholders will not be able to recover any losses suffered in the event a “war event,” as described in the above exclusion, materialises.

This is an international exclusion on insurance policies worldwide that is not covered by reinsurance treaties, and as such cannot be covered by insurers in TT.

Some brokers (my company included) have been advising their clients of the seriousness of this exclusion, and I wish to take this opportunity to advise the wider population of TT.

Policyholders should, therefore, where possible, take all reasonable steps to protect and safeguard their property in the event of an outbreak of war (and related risks).

The public must understand that while insurance provides a crucial safety net for many risks, war remains outside the scope of cover, and contingency planning and personal preparedness are now more important than ever.

KARAN RAMLAL

insurance MD