The bottom line is that both war and terrorist attacks are excluded
by the Institute
Cargo Clauses
IT IS a moot point as to whether the terrible happenings to date and the possible scenarios which will play out in the Middle East, can be described as "war". The Bush administration have described the attacks on America as an act of war. Surprisingly, there is no legal definition of an act of war, but generally it is regarded as the use of force by one sovereign State against another.
This of course does not deal with civil wars in which one sees factions or political groupings engaged in war against others within the same country (although in some Institute Clauses there are exclusions for damages arising from these causes as well).
In any event, the Institute Cargo Clauses exclude cover for loss, damage or expense caused by, inter alia "war, civil war, revolution, rebellion, insurrection or civil strife arising therefrom, or any hostile act by or against a belligerent power".
Arguably, the attacks on the United States do not fall within this exclusion. Nonetheless, if there is damage or loss arising from, for instance, militants hitting further targets including, say, the Suez Canal with suicide aircraft missions or missiles, this would not be either "war" nor an act by a "power", but would rather be a terrorist attack.
Nonetheless, this is also excluded by a different clause in respect of expense, damage "caused by any terrorist or any person acting from a political motive".
Leading underwriters in respect of the US attacks have already said that they do not intend relying on a distinction between terrorist and war attacks in order to contest liability for losses resulting from the US attacks. "However, in future, our view is that underwriters will seek to distinguish between the two," says Shepstone & Wylie's Shane Dwyer.
The bottom line is that both war and terrorist attacks are excluded by the Institute Cargo Clauses and Risk Managers. Similarly the Institute Hull clauses exclude both. All members of the maritime industry in South Africa therefore should consider their options seriously in respect of vessels or cargo which will be trading within war zones.
