Property Insurance and the Attack on the U.S. – Claims Magazine

Coverage for Property Loss, Business Interruption, and Additional Living Expenses

"WAR" AND "MILITARY ACTION" EXCLUSIONS

In light of the catastrophic nature of the losses of September 11, 2001, many have asked Property Loss Research Bureau whether the attacks could be considered "war" for the purposes of insurance coverage. While aviation policies and manuscript property policies sometimes expressly exclude loss due to acts of terrorism * [i], standard property insurance forms generally only exclude loss due to "war" and "military action." The exclusion in the New York Standard Fire is even narrower, applying only to loss caused "by: (a) enemy attack by armed forces, including action taken by military, naval or air forces in resisting an actual or an immediately impending enemy attack" as well as "(b) invasion; (c) insurrection; (d) rebellion; (e) revolution; (f) civil war; [and] (g) usurped power." N.Y. [Insurance] Law § 3404(e).

PLRB has previously examined these standard war exclusions and concluded that they generally do not apply to acts of terrorism because case law has required that "war" and "warlike operations" arise from armed conflict between sovereign nations or entities representing at least de facto governments. See PLRB, Catastrophe Bulletin – Oklahoma City Explosion (04/20/95); Catastrophe Bulletin -Terrorism and the War Exclusion (02/13/91); and PLRB Q. & A. Ref. Serv. Issue 105 – Terrorism (04/01/87). We have recently reexamined these issues and considered whether subsequent case law or any other factors might suggest a different result under the present circumstances. We have concluded that the substantial weight of legal authority continues to favor coverage unless an insurer can prove that terrorists operated as agents directed by a sovereign nation, government, or similar authority engaged in war with our country. Although the language of some war exclusions may be broad enough to be triggered in various kinds of conflicts short of formal or conventional war, historically courts have refused to interpret them so broadly as to allow insurers to escape liability when no government-like entity was engaged in armed hostilities with a similar entity. Any other acts, however "warlike" they might appear in organization, planning, and destructiveness, inevitably enter the realm of private, criminal conduct. While this may seem an arbitrary distinction, it is one that is difficult and perhaps impossible to abandon when the issue is deciding what risks private parties have agreed to exclude in an insurance contract. The fact that a particular loss is great and burdensome for the insurer ordinarily will not justify interpreting a policy exclusion in a new, unexpected way.

Even as to future acts of terrorism, it may be difficult for insurers to sustain their burden of proving that standard war exclusions might apply when there are no agreed upon criteria for deciding when terrorist acts cross the line from covered criminal conduct to excluded warlike actions. In the past, courts have relied on the conventions of international law and the historic understanding of the scope of war risk insurance to draw the line. In the absence of any practical alternatives, it may be reasonable for courts to continue to apply war exclusions narrowly, especially when, as long ago as 1974, a federal court ruled that an insurer could not rely on a war exclusion to escape liability for terrorist acts when terrorism exclusions were already in use in the London market. Pan Am. World Airways, Inc. v. Aetna Cas. & Sur. Co., 505 F.2d 989 (2d Cir. 1974).

In any event, any future military actions the United States might take against either the terrorists or nations that harbor them should not change the character of the events of September 11, 2001, for coverage purposes. As long as there is no compelling, admissible evidence that the terrorists were directed or sponsored by a government or government-like entity, it is highly improbable that war exclusions will be applied to any of the losses that already have occurred. The research and reasoning in support of these conclusions are explained in further detail in PLRB's "Terrorism and the War Exclusions – A Legal Analysis."

COVERED PROPERTY DAMAGE

Most kinds of property damage likely will be covered under multi-peril and named perils policies as caused by aircraft and vehicles, fire, explosion, falling objects, collapse, or some other non-excluded peril. If one of the war exclusions were to apply, it could defeat coverage since war exclusions are commonly prefaced with anti-concurrent causation language and most jurisdictions, including New York, enforce such provisions. See, for example, Kula v. State Farm Fire & Cas. Co., 628 N.Y.S.2d 988 (App. Div. 1995), reviewed at PLRB, Prop. Ins. L. Rev. 4346 (1995). Neither the standard war exclusions nor the New York statutory standard fire policy exclusions are likely to apply to losses from September 11, 2001. Nevertheless, if any future acts of terrorism were to be linked to hostile governments or otherwise found to fall within the scope of those exclusions, coverage could be denied on that basis.

POLLUTANT CLEAN UP AND REMOVAL

There have been conflicting reports on whether or not asbestos or other hazardous materials may have been dispersed in the area of the World Trade Center as a result of the plane crashes and the collapse of the towers and nearby buildings. If it turns out that asbestos or other kinds of contamination did occur, then coverage may turn on whether the substance at issue is a "pollutant" within the meaning of the policy and, even if it is, whether there would still be coverage under common exceptions to pollutant exclusions for a "Specified Cause of Loss" in Businessowners and Commercial Property policies and a "Peril Insured Against" under Homeowners policies.

A. Meaning of "Pollutant" under New York Law

New York courts have held that friable asbestos, dirt and dust from construction were pollutants under first-party pollution exclusions. See, American Heritage Realty Partnership v. La Voy, 618 N.Y.S.2d 125 (App. Div. 1994), reviewed at PLRB, Prop. Ins. L. Rev. 4182 (1995) (friable asbestos was a "thermal irritant" under the policy's definition of excluded pollutants); and Henry Modell & Co. v. General Ins. Co. of Trieste, 597 N.Y.S.2d 75 (App. Div. 1993), reviewed at PLRB, Prop. Ins. L. Rev. 3933 (1993) (construction dust, dirt, and debris that soiled retail merchandise were excluded "pollutants" or "contaminants"). One appellate court, however, decided that that ethylene glycol, a refrigerant, was not an excluded pollutant in light of case law interpreting pollution exclusions in liability policies as applicable only to pollutants released into the outside air, land, or water. Vigilant Ins. Co. v. V.I. Technologies, Inc., 676 N.Y.S.2d 596 (App. Div. 1998), reviewed at PLRB, Prop. Ins. L. Rev. 5196 (1999).

This suggests that there may be some confusion or disagreement among New York courts about how to interpret pollution exclusions in the context of first-party property insurance. As far as asbestos is concerned, however, there are decisions in favor of exclusion under both first-party property insurance and third party liability insurance. See American Heritage Realty Partnership v. La Voy, 618 N.Y.S.2d 125 (App. Div. 1994) reviewed at PLRB, Prop. Ins. L. Rev. 4182 (1995) (first-party); and A-One Oil, Inc. v. Massachusetts Bay Ins. Co., 672 N.Y.S.2d 423 (App. Div. 1998) and cases cited therein (liability). While asbestos was held not to be a pollutant under older forms of standard liability pollution exclusions in Continental Cas. Co. & Transp. Ins. Co. v. Rapid-American Corp., 593 N.Y.2d 966 (N.Y. 1993) and Miano v. Hehn, 614 N.Y.S.2d 829 (App. Div. 1994), the better-reasoned cases are those that have construed first-party property exclusions more broadly and those that have recently found asbestos to be a pollutant under newer forms of the liability exclusions.

Whether or not other kinds of dust and debris could be excluded as "pollutants" under first party property exclusions is not clear. While the court in Henry Modell & Co. v. General Ins. Co. of Trieste, 597 N.Y.S.2d 75 (App. Div. 1993), reviewed at PLRB, Prop. Ins. L. Rev. 3933 (1993), declared that construction dust, dirt, and debris that soiled retail merchandise were excluded "pollutants" or "contaminants," the court's decision to deny coverage was also based on a number of other factors including the untimeliness of the claim, the fact that the damages occurred eight months before inception of the policy, the fact that the insured knew of the damage prior to the inception of the policy, and because the court found that the faulty maintenance exclusion applied in light of the insured's failure to take steps to prevent the infiltration of the dust.

B. Coverage under Exceptions to "Pollutant" Exclusions

Even if asbestos or other kinds of dust or debris are considered "pollutants" under first-party exclusions, there still could be coverage for debris removal under standard policies that except damage caused by pollutants when they have been discharged or released as the result of a specified covered peril. For example, the "Specified Causes of Loss" under the BP 00 02 01 97 are: "Fire; lightning; explosion; windstorm or hail; smoke; aircraft or vehicles; riot or civil commotion; vandalism; leakage from fire extinguishing equipment; sinkhole collapse; volcanic action; falling objects; weight of snow, ice or sleet; water damage." Therefore, if any pollutants released as the result of the plane crashes or collapse of buildings at the World Trade Center, any resulting damage would likely be covered as caused by fire, explosion, aircraft, smoke, or falling objects and, in some instances, perhaps also by leakage from fire extinguishing equipment.

Similar exceptions to the exclusions in standard commercial and homeowners or renters policies could also result in coverage. Note, however, that the provisions of pollutant clean-up and removal in standard business and commercial policies may require reporting within 180 days of when the covered cause of loss occurs.

DETERMINING THE NUMBER OF OCCURRENCES FOR POLICY LIMITS AND DEDUCTIBLES

Determination of the number of policy limits and deductibles that will apply to the losses of September 11, 2001, may vary according to the policy language, the nature of the insurance at issue, and the interests of the parties involved. As far as property insurance is concerned, the relevant policy terms are likely to be "loss" or "occurrence" which typically are not defined in the policy. (See, for example, ISO BP 00 02 01 97 and CP 00 10 06 95.)

Because the terms are undefined, some courts hold that the phrase "one occurrence" is ambiguous in this context. Even courts that do not expressly find ambiguity tend to decide disputes in favor of the insured when it comes to applying limits of liability and deductibles for property insurance. Thus, when it favors the insured to apply only one deductible, a court will try to view the losses in terms of a single occurrence. Conversely, when it favors the insured to apply multiple limits of liability, a court will try to view the losses as independent, multiple occurrences.

In contrast, liability policies, crime policies, and employee dishonesty coverage in businessowners policies usually define their terms so as to clearly indicate that a series of acts or conditions may, under some circumstances, be considered a single occurrence for the purpose of applying limits of liability and deductibles. For example, an "occurrence" under a liability policy is typically defined as: "an accident, including continuous and repeated exposure to substantially the same harmful conditions." ISO BP 00 06 01 97. Both the policy terms and the nature of the risk insured tend to focus the analysis on the cause of the loss, which generally is human conduct for both liability and crime coverages. The particular policy language at issue is also very important as courts try to ascertain the intent of the parties concerning application of limits and deductibles.

Disputes over the number of occurrences for the purposes of determining coverage under liability and aviation policies may be complex and difficult to resolve. On the one hand, the events of September 11, 2001, could be viewed as a single occurrence since all four plane crashes apparently were planned by the same persons and the events were assigned a single catastrophe identification number. On the other hand, two different airlines were involved, the crashes occurred in widely scattered locations, and different kinds of liability issues may arise in each location. While the particular issues raised by liability and aviation policies are beyond the scope of this discussion, it should be noted that the outcomes will not necessarily be the same under these policies as it would under standard property insurance forms. In some circumstances there may be arguments in favor of a single approach in the interests of efficient claims processing. Nevertheless, differences in the intent and expectations of the parties in each contract generally favor different kinds of analysis with the potential for different outcomes. As one court explained these differences:

A liability policy is intended to protect an individual or a business from liability for their tortious conduct. Consequently, since that is the "business purpose sought to be achieved by the parties," it is eminently reasonable to look to the underlying conduct or cause of that liability.

On the other hand, when construing a property damage policy, as we are here, the business purpose sought to be achieved by the parties is considerably different. The goal of such a policy, simply stated, is to provide financial protection against damage to property. In accordance with this purpose, the parties here must have intended to provide coverage for property damage each time it occurred unexpectedly and without design, unless the damage occurring at one point in time was merely part of a single, continuous event that already had caused other damage.

Newmont Mines Ltd. v. Hanover Ins. Co. , 784 F.2d 127, 136 (2d Cir. 1986), reviewed at PLRB, Prop. Ins. L. Rev. 2216 (1986) (emphasis by court). See also, Edward J. Ozog,When the Roof Falls In, (1990) (paper on the meaning of "occurrence" in property insurance, available at PLRB, CQ-1990.01.01c and The Brief, 1990 Winter).

As a practical matter, the number of occurrences may not be an issue for most property insurance claims arising from these events as long as the applicable limits of liability are great enough to cover the insured's losses. Disputes could arise in the case of any underinsured businesses or other owners of property in Lower Manhattan who might try to apply multiple limits of liability if that would give them greater coverage. Given the situation at the World Trade Center where two planes crashed into different buildings at different times and each building collapsed at times separate from both the impacts and the collapse of the other tower, it may be possible for some damage or losses suffered by the same insured under a single policy to be traced to separate loss events that might be considered separate occurrences.

Where the number of occurrences becomes an issue for claims under property insurance, the outcome will probably depend on the physical causes of a particular loss. The fact that the ultimate cause of all the damage may have been a single scheme or conspiracy among terrorists probably will not be determinative. See, for example, Lexington Ins. Co. v. Commonwealth Ins. Co., No. C 98-3477 CRB, 2000 WL 74117 (USDC N. D. Cal. 1/24/00), reviewed at PLRB, Prop. Ins. L. Rev. 5588 (2000) (arson of four county courthouses by the same arsonist within a three-day period resulted in four occurrences in a dispute between primary and excess insurers); Goose Creek Consolidated I.S.D. v. Continental Cas. Co., 658 S.W.2d 338 (Tex. App. 1983) (two fires set by the same person within two hours of each other at two different locations were two loss occurrences for the purpose of applying deductibles).

Under New York law, courts look for a single "event that takes place without one's foresight or expectations" in deciding whether losses are the result of one or more occurrences. Johnson v. Indemnity Ins. Co., 196 N.Y.S.2d 678, 683 (N.Y. 1959); accord, Hartford Accident & Indemnity Co. v. Wesolowski, 350 N.Y.S.2d 895, 899 (N.Y. 1973). The focus, however, tends to be on the physical causes of the damage and whether those causes must be viewed in a single, unbroken chain of events following from the initial cause.

In Johnson, for example, the court held that the collapse of two retaining walls occurring within 50 minutes of each other at the same location during a heavy rainstorm were two separate occurrences. In reaching this conclusion, the court relied on the case of Anchor Cas. Co. v. McCaleb, 178 F.2d 322 (5th Cir. 1949), where an oil well blew up, remained out of control, and continued to erupt intermittently for 50 hours. In concluding that neighboring property was damaged in separate occurrences, the court described the blow-out as "a series of events, a catastrophe" in which "[n]umerous accidents were the product of this motivating force and the wind as a supervening force." Johnson, 196 N.Y.S.2d at 683, quoting McCaleb, 178 F.2d at 324. Thus, even though the damage could be traced to a single event, the blow-out of the well, the fact that the resulting damage occurred at different times under changing conditions allowed the court to find multiple rather than single occurrences.

Johnson dealt with a contractor's liability policy, rather than property insurance, so the desire to compensate the neighboring property owners may have been one factor in the court's decision. Nevertheless, the analysis employed by the court, was much the same as that applied in a property insurance case decided by the U.S. Court of Appeals for the Second Circuit (the federal court of appeals that has jurisdiction over federal courts in New York). In Newmont Mines Ltd. v. Hanover Ins. Co., 784 F.2d 127, 136 (2d Cir. British Columbia 1986), reviewed at PLRB, Prop. Ins. L. Rev. 2216 (1986), the court decided there had been two separate occurrences in a case involving collapse of two sections of a roof that occurred days apart but both as a result of the weight of accumulated snow. As in Johnson, the court emphasized the fact that two separate structures were involved and the collapse of one did not cause the collapse of the other.

How far a court might go to find multiple occurrences in a single catastrophe probably will ultimately depend on the interests of the particular parties involved, their abilities to bargain over terms, and their intent as evidenced by the policy language and perhaps the circumstances of the contract. One court, however, has suggested that the proper focus under Newmont Mines should be "on the distinctness or separability of the actual incidents of damage" rather than "the singularity or continuousness of the cause of damage." Mohawk Mountain Ski Area, Inc. v. American Home Assur. Co., No. 056905, 1995 WL 43696 at *14 (Conn. Super. 1995). Thus, in a case involving damage to a ski facility that allegedly was hit by two tornados within an hour of each other, the court concluded:

Under this case the question of one or two storms is unimportant. The real question is whether the two separate items of damage were causally related to each other, i.e. whether the individual items of damages are separable in time or space, or whether one contributed to the other.

Id.

While it is not certain whether New York state or federal courts would go this far towards finding multiple occurrences out of any of the events of September 11, 2001, the analysis suggests that at a minimum an insured would have to establish independent causes of any losses for which it might hope to apply separate limits of liability. As a practical matter, this would probably be very difficult to accomplish in the case of any claims involving property losses, but in theory, at least, a few insureds might have arguments in favor of application of separate policy limits. Insurers, on the other hand, probably would be far less likely to succeed in making the same arguments in favor of applying multiple deductibles as long as the facts and the policy language did not clearly mandate such a result.

BUSINESS INTERRUPTION

Perhaps the most difficult issues faced by property insurers will be handling and settling claims for business interruption. Businesses that carry this kind of insurance may be entitled to coverage for "actual loss of business income" sustained during the "period of restoration" as a result of "direct physical loss or damage to property at the 'described premises'. " ISO BP 00 02 01 97, Section A.5.f(1). In addition, they may be entitled to collect for extra expenses incurred during the "period of restoration" for their property. Section A.5.f(2). Finally, whether or not the business suffered any direct physical loss of property, it may be able to collect under Civil Authority coverage for:

… the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the described premises due to direct physical loss of or damage to property, other than at the described premises, caused by or resulting from any Covered Cause of Loss.

ISO BP 00 02 01 97, Section A.5.i. (Similar provisions are also in the ISO CP 00 30 06 95, Business Income and Extra Expense Coverage Form, Section A).

None of these coverages should extend to financial losses suffered by the many businesses across the country that did not suffer any direct physical loss or damage from the plane crashes and which suffered no loss of access to their premises due to actions by civil authority prohibiting such access. For example, a travel agency that simply lost business due first to the FAA shut-down in air traffic and later due to the decreased number of persons desiring to travel, would not be able to claim those losses under ordinary business interruption coverage. For such businesses, only contingent business interruption coverage would potentially cover lost business income.

A. Civil Authority Coverage

It is not clear how far Civil Authority coverage may extend for businesses in areas far from the crash sites where civil authorities prohibited access to airports, highways, federal office buildings, or other locations where it was feared that further terrorist attacks might happen. Civil Authority Coverage was originally intended to accomplish the following purposes:

The common intent was to extend the business interruption coverages to include situations where the insured's own property has not itself been damaged (or was not sufficiently damaged to cause as severe a business income loss as a total inability to occupy would cause) but because of damage to nearby property, the police or fire fighters cordon off the area and prohibit access, perhaps even to premises that have not been directly involved in the loss. The prohibition may extend beyond the time of the actual fire, if, for instance, there is danger to adjacent buildings from collapse of the damaged property. Or in the case of extensive wind damage, an entire disaster area may be cordoned off for an extended period after the actual loss, to prevent looting or possible danger to onlookers, until the damage can be assessed and order can be restored.

FC & S Bulletins, Business Interruption Ca-1 (May, 1987). When urban riots in the1960's caused authorities to shut down large areas of cities in response to actual or feared outbreaks of violence, large numbers of claims were filed from businesses some distance from areas that actually suffered property damage from rioting. This prompted a 1969 change in ISO forms requiring that damage occur to property "adjacent" to the insured premises. That requirement was later removed as a result of 1986 form changes. Current versions now simply require that physical damage be to property "other than at the described premises."

Case law on these and other variations of Civil Authority coverage has led to diverse results as described by Paula B. Tarr and Herbert J. Baumann, Jr. in their article, Where Have All The Customers Gone: Business Interruption Coverage For Off Premises Events (available at PLRB PCQ.1999.12.02). Nevertheless, these authors have gleaned from the cases the following practical limitations on Civil Authority Coverage:

(1) There must be an order of civil authority, which order must prohibit access to the premises in the nature of a cordoning off. It would not be enough, based on Syufy [Syufy Enterprises v. Home Ins. Co.,1995 U.S. Dist. LEXIS 3771 (N.D. Cal. 1995)], that the authorities imposed an overall curfew unless the order made it clear that no one would be permitted to enter the insured premises, or the area in which it was located.

(2) The order must be caused by actual physical damage to property other than the insured premises. The geographical requirement that the physical damage be to "adjacent property" has been eliminated, leaving only the causal relationship requirement. This is a broader coverage, but it is not without limits. In many cases, the further the physical damage is from the insured premises, the more difficult it is for the insured to establish the causal link between that damage and the order.

(3) The physical damage must be from a covered peril.

(4) The order must cause an interruption of the business. The coverage would not apply where, for example, an area is subject to a dusk-to-dawn curfew, but the insured business is not usually open during those hours.

(5) The interruption resulting from the order must cause a loss of income. There can be a reduction in business income caused by the peril that is not caused by the order. There can be a fall-off in business income resulting from things like failure of utility services or merchandise deliveries, cancellation of events that usually bring substantial numbers of tourists into the area, and just the fact that local residents and other potential customers may be so busy attending to their own problems caused by the occurrence of the peril that they do not patronize the insured business. These factors would not be caused by the order and, therefore, any loss sustained as a result of them would not be covered under the civil authority clause.

Id.

B. Business Income Coverage

Businesses near or at the sites of the plane crashes may be entitled to recover loss of business income, but difficulties may arise in light of the fact that many of the businesses located in or near the World Trade Center were service businesses, rather than retail or manufacturing firms (for which lost profits are easier to calculate), and some may have lost all or most of their business records in the disaster. In addition to these formidable evidentiary problems, there may be difficulty evaluating both property and business interruption coverages in light of the complex series of physical events that occurred in New York City, ranging from direct impact by planes, collapsed structures, and falling debris to area power failures, service interruption, and actions by civil authorities prohibiting or restricting access to certain areas.

Coverage analysis of these kinds of losses will necessarily be dependent on the particular facts of individual claims. As PLRB receives and answers coverage questions arising from these events, we will publish them for PLRB member companies via our web page on the Coordinated Attack on the U.S. and later will make them available in our database with other archived CQ's. PLRB also has a number of reference materials on business income and civil authority coverages available to members including: PLRB's Businessowners Annots., BP Key 29 – Business Income; Paula B. Tarr and Herbert J. Baumann, Jr., Where Have All The Customers Gone: Business Interruption Coverage For Off Premises Events (available at PLRB PCQ.1999.12.02); and a review of Fountain Powerboat Industries, Inc. v. Reliance Ins. Co., 118 F. Supp. 2d 552 (E.D. N.C. 6/20/00), at PLRB, Prop. Ins. L. Rev. 5781 (2001), a recent case applying Civil Authority coverage.

VI. ADDITIONAL LIVING EXPENSES UNDER HOMEOWNERS POLICIES

Coverage similar to Business Interruption and Civil Authority coverages for businesses may be available to homeowners or renters whose homes were at or near the crash sites and were insured under Homeowners or similar policies with provisions for Additional Living Expenses. Most policies in effect at the time of the attack may have had language similar to the ISO HO-3 which covers loss of use of the residence premises if a covered loss makes it "not fit to live in" or if "a civil authority prohibits use of the residence premises as a result of direct damage to neighboring premises by a Peril Insured Against." ISO HO 00 03 04 91. Coverage for Additional Living Expense or Fair Rental Value is available under the first condition of the HO-3 is for "the shortest time required to repair or replace the damage" or, if the insured permanently relocates, for "the shortest time required . . . to settle elsewhere." Civil authority coverage available under the form is limited to a period of "no more than two weeks."

Some of the questions PLRB have addressed include: CQ-2001.09.27 ("Does the Homeowners policy afford Loss of Use coverage for loss sustained by a college student living away from the Residence Premises?") and CQ-2001.09.24 ("Are insureds entitled to purchase clothing and other essentials to get them through the time they are away from their homes?). These and other responses are available to PLRB members at www.plrb.org.

* Aviation hull and liability policies usually expressly exclude the risk of terrorism and hijacking. Rod D. Margo, Aspects of Insurance in Aviation Finance, 62 J. Air L. & Com. 423, 445 (1996). The war risk exclusion known in the London market as AVN 48 specifically excludes claims caused by:

(a) War, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, martial law, military or usurped power or attempts at usurpation of power.

(b) Any hostile detonation of any weapon of war employing atomic or nuclear fission and/or fusion of other like reaction or radioactive force or matter.

(c) Strikes, riots, civil commotions or labour disturbances.

(d) Any act of one or more persons, whether or not agents of a sovereign power, for political or terrorist purposes and whether the loss or damage resulting therefrom is accidental or intentional.

(e) Any malicious act or act of sabotage.

(f) Confiscation, nationalization, seizure, restraint, detention, appropriation, requisition for title or use by or under the order of any Government (whether civil, military, or de facto) or public or local authority.

(g) Hijacking or any unlawful seizure or wrongful exercise of control of the Aircraft or crew in flight (including any attempt at such seizure or control) made by any person or persons on board the Aircraft acting without the consent of the insured.

Furthermore, this Policy does not cover claims arising whilst the Aircraft is outside the control of the insured by reason of any of the above perils. The Aircraft shall be deemed to have been restored to the control of the Insured on the safe return of the Aircraft to the insured at an airfield not excluded by the geographical limits of the Policy, and entirely suitable for the operation of the Aircraft (such safe return shall require that the Aircraft be parked with engines shut down and under no duress.

Id. at 445 n. 91, citing Rod D. Margo, Aviation Insurance 6 (2d ed. 1989).

Manuscript property insurance policies also have excluded loss or damage caused by acts of terrorism. For example, the policy at issue in Sherwin-Williams Co. v. Ins. Co. of the State of Pa., 863 F. Supp. 542 (N. D. Ohio 1994) (theft and vandalism claims following U.S. takeover of Panama), contained the following war exclusion:

This policy does not insure:

A. Loss or damage occasioned by or through or in consequence, directly or indirectly, or any of the following consequences, namely:

(1) War, invasion, act of foreign enemy, hostilities or warlike operations (whether war be declared or not), civil war.

(2) Mutiny, civil commotion assuming the proportions of or amounting to a popular rising, military rising, insurrection, rebellion, revolution, military or usurped power.

(3) Acts of terrorism committed by a person or persons acting on behalf of or in connection with any organization. For the purpose of this condition, "terrorism" means the use of violence for political ends and includes any use of violence for the purpose of putting the public or any section of the public in fear.

(4) In any action, suit or other proceedings, where the Company alleges that by reason of the provisions of this condition any loss or damage is not covered by this insurance, the burden of proving that such loss or damage is covered shall be upon the insured.

Id. at 545.