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Caribbean terror A legal analysis of the allocation of property losses in insurance contracts in the context of terrorist activity

Caribbean terror A legal analysis of the allocation of property losses in insurance contracts in... Purpose – The purpose of this paper is to explain why, as a matter of law and policy, loss suffered as a consequence of terrorism, insurrection and/or civil uprising is not generally compensable in insurance law. The paper postulates that it is the duty of the state, particularly in small states, to compensate loss of this type. Design/methodology/approach – The paper achieves this objective by studying the attempted coup d' é tat by Muslim fundamentalists in Trinidad and Tobago in 1990 and the devastating property losses suffered during the attempted coup as a consequence of looting and arson. The standard terms of two main policies then in use are meticulously set out and examined in the context of the relevant case law and textbook learning on the subject of losses of this type. Findings – The paper demonstrates that losses occasioned as a consequence of activity of the type under reference – that is terrorist activity, insurrection and civil uprising – cannot be dealt with by insurance companies and that it falls to the state as the guardian of national security and as an honest broker in the development of the economy to ensure even development by compensating losses occasioned as a consequence of terrorist activity, insurrection and/or civil uprising. Originality/value – The paper for the first time puts in context losses of the type now being experienced in many parts of the world and explains the limitations of the traditional insurance law principles to treat with these losses. The solution of state compensation as a last resort to compensate innocent victims in these circumstances is advanced as a possible solution. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Crime Emerald Publishing

Caribbean terror A legal analysis of the allocation of property losses in insurance contracts in the context of terrorist activity

Journal of Financial Crime , Volume 18 (4): 23 – Oct 11, 2011

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1359-0790
DOI
10.1108/13590791111173669
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to explain why, as a matter of law and policy, loss suffered as a consequence of terrorism, insurrection and/or civil uprising is not generally compensable in insurance law. The paper postulates that it is the duty of the state, particularly in small states, to compensate loss of this type. Design/methodology/approach – The paper achieves this objective by studying the attempted coup d' é tat by Muslim fundamentalists in Trinidad and Tobago in 1990 and the devastating property losses suffered during the attempted coup as a consequence of looting and arson. The standard terms of two main policies then in use are meticulously set out and examined in the context of the relevant case law and textbook learning on the subject of losses of this type. Findings – The paper demonstrates that losses occasioned as a consequence of activity of the type under reference – that is terrorist activity, insurrection and civil uprising – cannot be dealt with by insurance companies and that it falls to the state as the guardian of national security and as an honest broker in the development of the economy to ensure even development by compensating losses occasioned as a consequence of terrorist activity, insurrection and/or civil uprising. Originality/value – The paper for the first time puts in context losses of the type now being experienced in many parts of the world and explains the limitations of the traditional insurance law principles to treat with these losses. The solution of state compensation as a last resort to compensate innocent victims in these circumstances is advanced as a possible solution.

Journal

Journal of Financial CrimeEmerald Publishing

Published: Oct 11, 2011

Keywords: Trinidad and Tobago; Property insurance; Terrorism; Insurance law; Terrorist activity; State responsibility; Looting; Arson; State compensation; Loss

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