Political Violence and Terrorism (PVT) insurance helps to manage some of the world’s most complex and unpredictable risks. From terrorism and sabotage to civil unrest and armed conflict, the market has evolved over many decades in response to changing geopolitical events, adapting to new threats as they emerge.
While the nature and location of these risks continue to shift, the need for specialist claims expertise has remained constant. McLarens’ London International team, together with colleagues across the wider group, has managed claims arising from events in Ukraine, Beirut, Syria, the UAE, Bahrain, the UK, Belgium, Colombia, Kenya, the Democratic Republic of Congo and Yemen. These experiences demonstrate how political violence claims extend well beyond physical damage, often involving complex questions of causation, policy interpretation, security and business interruption.
An evolving area of insurance
Political Violence and Terrorism insurance developed in response to the growing recognition that war, terrorism and civil unrest created risks too volatile for traditional insurance. The attacks of 11 September 2001 marked a defining point in the evolution of the market, while more recent events including the Arab Spring, the conflict in Ukraine and ongoing tensions across the Middle East have continued to shape both policy wordings and claims handling.
Policies may provide cover for losses arising from terrorism, sabotage, riots and civil commotion, strikes, insurrection, rebellion and, under some specialist wordings, certain war-related risks. However, the scope of cover varies significantly.
Responding to conflict in the Middle East
The recent conflict involving Iran, Israel and the United States illustrates the nature of modern political violence claims.
As hostilities escalated across the region, McLarens received a significant volume of instructions under Political Violence policies covering a broad range of commercial risks. Wherever possible, adjusters attended affected locations to establish the factual circumstances of each loss, advise insurers on mitigation measures and begin quantifying damage.
Access to many sites was restricted by security considerations and military controls. In several cases, satellite imagery – normally an important investigative tool – was unavailable because providers were subject to embargoes imposed during the conflict.
Policy coverage also varied considerably, ranging from comprehensive war risks cover to policies responding only to sabotage and terrorism. Many contained absolute war exclusions, requiring detailed analysis of both the factual circumstances and policy wording to determine the operative insured peril. Business interruption claims presented similar complexities, particularly where depressed regional economic activity and supply chain disruption affected trading performance.
Different regions, different risks
Although the underlying principles remain consistent, political violence exposures differ significantly between regions.
Across Africa, claims frequently arise from terrorism, insurgency, election-related unrest, civil disorder and sabotage. McLarens has handled claims linked to events involving Boko Haram, Al-Shabaab and the M23 rebel movement, alongside losses arising from wider political unrest and community violence.
Europe, while historically perceived as a lower-risk region, has also experienced significant terrorism incidents, civil unrest and politically motivated protests affecting commercial property, hospitality, transport and retail sectors. Events including the Paris attacks, the Brussels bombings, the Manchester Arena attack and periods of widespread civil disorder demonstrate that political violence remains a material exposure across mature insurance markets.
An evolving role for specialist loss adjusters
As political violence claims become more varied and interconnected, investigations increasingly require adjusters to consider complex questions of causation, coverage and quantum.
Modern technology has significantly enhanced the investigation of political violence claims. Many losses occur in active conflict zones where military restrictions, security concerns or curfews prevent immediate site access. In these circumstances, satellite imagery, drone surveys, digital mapping and remote sensing can provide valuable evidence, supplemented by CCTV footage, mobile phone recordings, social media, security reports and government intelligence.
However, technology cannot remove the need for careful policy interpretation. Adjusters must often determine whether damage resulted from terrorism, war, sabotage or civil commotion, while business interruption claims require equally careful consideration of whether losses resulted from physical damage, government restrictions or wider regional economic conditions.
Lessons for the insurance market
Political violence and terrorism risks will continue to evolve as new conflicts emerge and geopolitical tensions shift. While the nature of individual events may change, the need for careful investigation, sound policy interpretation and specialist claims expertise remains constant.
