Amid escalating geopolitical tensions between the United States and Venezuela, the Insurance Brokers Association of Trinidad and Tobago has issued a stark warning to businesses: standard insurance policies provide no coverage for war-related damages. The December 11 advisory emphasized that catastrophic and unpredictable nature of conflict losses makes them fundamentally uninsurable through conventional means.
The association’s executive board member Navin Dookeran acknowledged that while brokers can explore specialized foreign insurers for potential coverage options, the global insurance market universally struggles with pricing war risk premiums due to the inherent unpredictability of conflict-related losses.
This warning carries particular significance for Trinidad and Tobago, where historical precedents demonstrate the devastating financial impact of civil unrest. The 1990 attempted coup by Yasin Abu Bakr resulted in over $1 billion in losses from looting and property destruction, mirroring similar insurance claim denials following the 1970 Black Power demonstrations. Legal test cases including the Nahous and Grell-Taurel actions ultimately confirmed insurers’ exemption from covering conflict-related losses.
The current geopolitical climate presents additional economic vulnerabilities beyond direct physical damage. Should Trinidad and Tobago be classified as a high-risk zone due to proximity to US-Venezuela tensions, the country could face substantial increases in shipping and aviation insurance costs. This scenario echoes post-9/11 developments when the FAA expanded its Aviation War Risk Program after private insurers canceled policies following massive claims.
Specialized coverage options like Bumbershoot policies exist for commercial maritime war risks, but these remain niche products with limited accessibility. The insurance industry’s position reflects the harsh economic reality that war creates fundamentally unquantifiable risks that challenge the very foundations of insurability.