Did this Insurer Really Need to go to War?

Did this Insurer Really Need to go to War?

Man walks into basement and discovers unexploded bomb.

This isn’t really the beginnings of a joke, but the man’s likely treatment by his insurers would be a laughing matter if it were not so serious.

There has been a recent spate of unexpected bombs discovered near to property; fortunately, they have been disarmed without incident.  But homeowners in the vicinity probably had no inkling that they would have been unlikely to be insured had one of the bombs fulfilled their original purpose and caused serious damage.  This is unknown, and uninsured, peril of (the last) war came to light at Exeter university.

The case of Exeter University and Allianz is worthy of careful examination in the light of modern insurance practice. It is by good fortune that an undiscovered, unexploded bomb has not destroyed a private home in circumstances similar to this case. It is important for the insurance industry’s position to be clear.

A controlled explosion to diffuse a WW11 bomb near the university resulted in ‘explosion damage’ to some of the university’s property. The insurer relied on the policy’s War exclusion to refuse indemnity. The matter went to the High Court and was eventually referred to the Court of Appeal.  The judgement in University of Exeter v Allianz Insurance Plc [2023] EWCA Civ 1484 is worthy of careful examination, in the light of apparent modern insurance practice.

It is only by good fortune that an undiscovered, unexploded bomb has not destroyed a private home in circumstances similar to this case and it is important for the insurance industry’s position on this rare possibility of loss, to be made clear.

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