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Property Owners May Face "War Exclusion

ST. PAUL, MN-St. Paul Cos., like other commercial property insurers, is not eager to comment on the issue in the wake of the terrorist attack of the World Trade Center. The issue could end up in court, however.

By Jim McCartney | Updated on September 14, 2001

ST. PAUL, MN-Is it war or is it terrorism — that is a $30-billion question hanging over the heads of property owners in New York and insurance companies all over the country.Damage due to war is an almost universal exclusion in property insurance policies; yet acts of terrorism are different from acts of war and cannot be excluded fromcoverage.

Insurance groups, including the International Risk Management Institute, have beenclear in saying that. “It’s a very interesting issue,” says Rich Thomas, a St. Paul attorney specializing in insurance coverage issues.

Property-casualty insurance companies have been less eager to comment on the subject. For instance, The St. Paul Cos., a major commercial property liability insurer with an undetermined exposure to the World Trade Center calamity, says it simply has not addressed the war exclusion issue. The company has focused on helping its clients and its own New York operations recover from the attack, says David Monfried, a spokesman for the St. Paul-based insurer.

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