STRIKES, RIOTS & TERRORISM ANALYSIS OF RISK FROM FIRE INSURANCE PERSPECTIVE

Mohtarma Benazir Bhutto assassinated Riots erupt all over Pakistan almost immediately Damage by rioters continue for 3 days A number of incidents also involved acts of sabotage particularly interior Sindh Most rioters were armed with weapons

Was the assassination the cause of the rioting etc that followed? “Tappoo Holdings” May 2000 military coup. Prime Minister arrested Rioting erupts in Fiji Supreme Court rules rioting “indirectly caused by the military coup

The Pakistan rioting was it caused by the assassination? Was the assassination an act of “Terrorism”? Almost immediately after the assassination rioting occurred Courts have ruled insurance wordings to determine

Standard RSD Endorsement Condition 6 reads: “This insurance……….directly or indirectly of …….. (c) Acts of Terrorism committed by a person or persons acting on behalf of or in connection with any organisation” Terrorism is defined as: “…..the use of violence for political ends and includes any use of violence for the purpose of putting the public or any section of the public in fear”

International market including most treaties would be subject to NMA2919 (War & Terrorism Exclusion) or NMA2920 (Terrorism Exclusion) These wordings came into effect after 9/11 The exclusion is very much widened Definition of Terrorism is expanded

The Operative clause reads: “Notwithstanding……..excludes loss, damage,….of whatsoever nature……..directly or indirectly caused by, resulting from or in connection with ……..regardless of any other cause or event contributing concurrently or in any other sequence to the loss”

Terrorism is defined as: “…….means an act, including but not limited to the use of force or violence and/or the threat threat, of any person or group(s) of persons whether acting alone or on behalf of or in connection with any organisation(s) or government(s), committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public, or any section of the public in fear

Major variances: Exclusion preamble extends the “Proximate Cause” by “…regardless of any other cause……..contributing…….” Definition expanded to include person(s) even if acting alone and purpose to include “religious, ideological” reasons

Standard Fire policy excludes Terrorism? Our IAP wordings need amending? Coverages available T3 – Excludes SRCC LPO437 – All political violence Local Pool - Other countries of our similar size pools are for all political violence i.e SRCC and Terrorism