top of page

A risk manager's view on war

By Michael F. Rellosa

I am not a warmonger, but it is getting harder to ignore the incessant drumbeats which seem to be getting louder through the days. Ukraine and Russia, Israel and Gaza, Sana, Yemen and the Red Sea, and the other tinder dry flash points across the globe, such as our own front yard, the West Philippine Sea.

A risk manager worth his salt should not ignore the risks of the damage a war could bring to his company. He is supposed to identify, evaluate and manage the myriad risks that his company faces. However, the question is, could he insure against war perils? Or, put another way, are damages caused by war covered by insurance? The answer is not so straightforward. As a rule, war perils are excluded under your run-of-the-mill policies, the reason being that losses due to war can be catastrophic and bankrupt insurance companies. Those who have their properties insured are advised to read their policy conditions to see if they have a "war exclusion clause," which typically excludes from the policy coverage any damage arising from war or similar activities. However, there are special war coverages that one can obtain, albeit at additional premiums, which can increase as the likelihood of a conflict increases or the capacity for such coverage evaporates altogether. This elusive and expensive coverage (in times of war) is usually known as war risk coverage and typically covers kidnapping and ransom, sabotage, emergency evacuation, worker injury, long-term disability and loss or damage to property or cargo.

Another risk management tool that one can use in times like these is to try and mitigate the effects of war on your person or your family, and the best way to do this is to be a Prepper. Start by assembling a bug-out bag, the same as one would do when preparing for the natural catastrophe risks of earthquakes, typhoons and floods. The usual items one includes in the bag would be a few days' worth of food, water, your maintenance and common medication, an independent power source, a radio, batteries, and durable and comfortable clothing. The list goes on, so make sure it is light enough for you to carry if the need to evacuate presents itself. There are numerous websites that explain what being a prepper is and what one can do to prepare. I suggest that you take a look. We must keep in mind that we cannot eliminate all these risks but we can certainly lessen them.

Finally, if we have done everything humanly possible, let us not lose our faith. Be prepared, know your options, stay calm and leave the rest to the Almighty!


bottom of page