War risk insurance covers damages due to acts of war, such as invasions, revolutions, and military coups. Some insurance companies also consider terrorism as a war risk, although others may classify it as a separate risk. War risk insurance can cover the cost of property damage, bodily injury, death, emergency evacuations, and other problems that occur during a war.
Most insurance policies do not cover losses due to acts of war. Therefore, if a company, for example, does business in a politically unstable country or one in which a revolution erupts, it would make sense to purchase war insurance coverage for its property and employees in that country.
Private insurance companies do not always offer war risk insurance coverage for every situation. For example, soldiers have a lot of trouble buying life and disability insurance because they are considered too high risk. In these situations, the government sells war risk insurance through various programs.
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