The New "War Exclusion" in Your Coming Insurance Coverage

09/29/2017 03:35 pm ET

A friend of mind shocked me with a text, saying “look what I got in the mail today!” I was taken aback upon seeing it and I was given permission to share its contents. The document, from CHUBB (one of the world’s largest property and casualty insurance companies), stated in bold italics at the top “Important Notice to Policy Holders.” The next line appeared more ominous, stating “ Access to or Disclosure of Confidential or Personal Information.” Then, the document drops a bomb:


The document then warns that “At the next renewal your policy providing commercial excess or umbrella liability insurance may contain a new exclusion with respect to Access To Or Disclosure Of Confidential Or Personal Information.” What is the nature of that exclusion? It goes on to say that “At the next renewal, your policy providing commercial excess or umbrella liability insurance may contain a new exclusion with respects to War.” All of a sudden, life seemed very sci-fi.

For decades property insurance has often not included coverage for “war.” I would suspect that, if this person reviewed the information, there will be no war coverage mentioned. However, the situation between the US and North Korea has reached such a fever pitch, for many insurers it is now becoming time to warn their clients they are not getting insurance compensation if their property is destroyed due to war. Furthermore, if they want such coverage, you might want to look elsewhere for it.

This led me to think about what kind of implications a confrontation with North Korea would have on the United States. As mothers and fathers open up these notices, you can see how they can create tension in a family as the potential of war comes so close to home.

For quite a while there has been talk about the “Trump Effect” on business and even the “Trump Rally.” However, when business owners are looking at the possibility of their business being literally hit by a war, it they will begin to feel fear rather than confidence, no matter how much he reduces regulations or attempts to stimulate the economy with tax cuts. For businesses, this is quickly becoming an existential crisis.

The US has war fatigue from decades of “solving” the world’s problems and the cost has been enormous. The US has just surpassed the $20 trillion debt mark and with several hurricanes hitting the country, a policy pathway has been created to add even more debt. The policy is being called a “suspension” of the debt ceiling. It will be frightening to see where the US will be after dealing with, financially, all of these disasters. The prospect of a war with North Korea — and the possible loss of US lives and billions of dollars — is taxing on an already tired American people.

Now, war of some sort seems inevitable. Trump’s comment that the North Korean leader would “not be around long” has been interpreted as an act of war. The follow up announcement by the North Korean regime that they “reserve the right” to shoot down US war planes that are not over its territory is a direct violation of the fragile truce that all combatants have been under since July 1953.

I had dinner with another friend of mine and we discussed the North Korea situation. He is a supporter of the President, but he admitted to me that threats “were no way to deal with a mad man.” I told him, “that begs the question, is not the person who made such a threat, to such a person, as mad as the one who received it?” That was a question he did not want to answer. However, official Washington needs to start asking — and answering — that question.

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