Exclusion under Terrorism
One of Exclusions is the Add on cover of Terrorism perils is
“ The warranty also excludes loss, damage, cost or expenses of whatsoever nature directly or indirectly caused by, resulting from or in connection with any action taken in controlling, preventing, suppressing or in any way relating to action taken in respect of any act of terrorism.”
It means any loss/damage to the property during controlling of terrorism activity between Forces and Terrorist will not be covered. Example: Suppose the Terrorists have taken shelter in a House/Industry and the exchange of fire between Force /Police and Terrorist resulting the damage/loss is not covered. It covers loss if the property/assets damaged directly by the Terrorist.
Based on this exclusion, a claim of a lady in Srinagar was repudiated as her house was damaged as Terrorist were hiding in her house and exchange of fire between Forces and Terrorist resulting the damage to her house. The claim amount was Rs 5 lakhs but after 6 months the incident of Mumbai attack on 26/11 the claim was settled ignoring this exclusion clause.