War risk insurance is a type of

insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

which covers damage due to acts of

war War is an intense armed conflict between states, governments, societies, or paramilitary groups such as mercenaries, insurgents, and militias. It is generally characterized by extreme violence, destruction, and mortality, using regular o ...

, including

invasion An invasion is a military offensive in which large numbers of combatants of one geopolitical entity aggressively enter territory owned by another such entity, generally with the objective of either: conquering; liberating or re-establishing ...

insurrection Rebellion, uprising, or insurrection is a refusal of obedience or order. It refers to the open resistance against the orders of an established authority. A rebellion originates from a sentiment of indignation and disapproval of a situation and ...

rebellion Rebellion, uprising, or insurrection is a refusal of obedience or order. It refers to the open resistance against the orders of an established authority. A rebellion originates from a sentiment of indignation and disapproval of a situation and ...

and

hijacking Hijacking may refer to: Common usage Computing and technology * Bluejacking, the unsolicited transmission of data via Bluetooth * Brandjacking, the unauthorized use of a company's brand * Browser hijacking * Clickjacking (including ''like ...

. Some policies also cover damage due to

weapons of mass destruction A weapon of mass destruction (WMD) is a chemical, biological, radiological, nuclear, or any other weapon that can kill and bring significant harm to numerous individuals or cause great damage to artificial structures (e.g., buildings), natu ...

. It is most commonly used in the

shipping Freight transport, also referred as ''Freight Forwarding'', is the physical process of transporting commodities and merchandise goods and cargo. The term shipping originally referred to transport by sea but in American English, it has been ...

and

aviation Aviation includes the activities surrounding mechanical flight and the aircraft industry. ''Aircraft'' includes airplane, fixed-wing and helicopter, rotary-wing types, morphable wings, wing-less lifting bodies, as well as aerostat, lighter- ...

industries. 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. Private war risk insurance policies for aircraft were temporarily cancelled following the

September 11, 2001 attacks The September 11 attacks, commonly known as 9/11, were four coordinated suicide terrorist attacks carried out by al-Qaeda against the United States on Tuesday, September 11, 2001. That morning, nineteen terrorists hijacked four commer ...

and later reinstated with substantially lower indemnities.War Risk Insurance
(iata.org) In the wake of this cancellation, the US federal government set up a terror insurance program to cover commercial airlines.War-risk insurance program for airlines up for renewal
''Chicago Business Journal'', Aug. 10, 2006. The

International Air Transport Association The International Air Transport Association (IATA ) is a trade association of the world's airlines founded in 1945. IATA has been described as a cartel since, in addition to setting technical standards for airlines, IATA also organized tariff ...

has argued that airlines operating in states which do not provide war risk insurance are at a competitive disadvantage in this area.

References

Types of insurance {{finance-stub