Property Insurance And The Terrorist Exclusion

In the immediate aftermath of the recent shooting in San Bernardino, much of the focus, apart from concern for the victims and their families, was on understanding whether the violence was in fact an act of terrorism.

As employers and property owners in Canada increasingly turn their minds to the risks of terrorism in our own country, and consider how best to address their own potential liability, the same question could be vital in determining whether an insurance policy would respond in the event of losses from a terrorist event.

This is because following 9/11 many Canadian insurers introduced "terrorism exclusion" provisions in property and liability policies. Such provisions exclude coverage for loss or damage caused by "terrorism" or actions taken to respond to "terrorist" activity – terms that may be but are not necessarily defined in such policies.