War Risks insurance is a type of insurance which covers damage due to acts of war, including invasion, insurrection, rebellion and hijacking. Some policies also cover damage due to weapons of mass destruction. War risk insurance generally has two components: War Risk Liability, which covers people and items inside the craft and is calculated based on the indemnity amount; and War Risk Hull, which covers the craft itself and is calculated based on the value of the craft. The premium varies based on the expected stability of the countries to which the vessel will travel.
War Risks insurance covers damage and loss caused by the deliberate acts of third parties against a ship, including cover for losses caused by:
- war, civil war, revolution and rebellion
- capture, seizure, arrest, restraint or detention
- mines, torpedoes, bombs or other weapons of war, even when derelict
- strikes and labour disturbances
- terrorists, people acting maliciously or from a political motive
- piracy or violent theft by people from outside the ship
These risks are generally excluded from hull and P&I covers. So the cover is designed to fill the gaps those exclusions create.
Lloyd's Joint War Committee