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What is “War Perils” in marine cargo insurance?
“War Perils” refer to perils that are caused by hostile acts by authorities using political or executive powers. Since “War Perils” can embrace many forms of loss, all insurance contracts covering war risk will specify the perils covered and incorporate exclusion clauses to ensure the cover can be clearly understood.
A policy insuring against war perils is called War Risk Insurance and is usually issued as a companion to a Marine Cargo Insurance policy. Such companion policies generally cover specified “War Perils” as illustrated below:
1.1 War, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power
1.2 Capture, seizure, arrest, restraint or detainment, arising from risks covered under 1.1 above, and the consequences thereof or any attempt thereat
1.3 Derelict, mines, torpedoes, bombs or other derelict weapons of war
It also covers general salvage charges incurred to avoid loss from a risk covered under these clauses.
However, perils such as terrorist activities, riots or civil commotions are not included within the term “War Perils”.
To safeguard shipments from risks such as war, civil wars and rebellion, etc. it is recommended to take out War Risk Insurance as most Marine Cargo Insurance policies do not cover goods against these perils. War Risk Insurance usually comes with a separate premium charge which is determined by the political situation of the final destination and therefore may vary shipment by shipment.