War peril refers to risks that can cause losses during a war. This includes property damage during a battle, insurgents stealing cargo, or the kidnapping or injury to a company's employees while in a war zone. Most regular insurance policies do not cover war perils because insurance companies find these risks to be too great and too expensive to cover.
There are war insurance policies specifically designed to cover war perils. For example, a company can buy a war insurance policy to protect against property damage and theft when they do business in a country at war.
However, some war perils are considered just too expensive for the private market to cover. In these cases, the government provides insurance. For example, after 9/11 insurers stopped selling affordable liability coverage for commercial planes; therefore, the Federal Aviation Adminstration started providing this insurance.
Share this Term
Stay informed with Insuranceopedia!
The world of insurance can be complicated. Subscribe to the Insuranceopedia newsletter and stay in the know! Access expert content, industry term definitions and answers to your questions from knowledgeable insurance insiders. Arm yourself with what you need to know to keep your assets and your family safe.
Latest Articles
