Despite the ongoing media coverage referring to recent events as a “war” against Iran, President Donald Trump and his administration are very carefully referring to their actions as “military operations”. Indeed, House Speaker Mike Johnson rejected the idea that the US is at war with Iran and denied that the House needed to have a vote on the War Powers Act at his weekly press conference. These conflicting stances around the classification of state actions have once again brought into sharp focus the importance of defining “war” for the purposes of insurance cover.
This question is not merely academic. The classification of events as war, civil war, or lesser forms of hostility has profound consequences for coverage across multiple lines of business, particularly where policies contain war exclusions, war risk buy-backs, or endorsements addressing strikes, riots and civil commotion. While the language of “war” is often used colloquially by governments, media, and commentators, insurance policies typically rely on more technical, tightly defined definitions, developed through decades of underwriting practice and judicial interpretation.
Definition of 'war'
'War' is often given a very wide definition in insurance policies, often referring to 'hostile action' rather than armed conflict. Given the importance of the definition of “War” in the context of policy coverage, it is useful to look back at the relevant case law as the principles discussed therein remain relevant to the recent events in the Middle East..
When construing a contract under English law, it is necessary to ascertain the objective meaning of the language with which the parties expressed their agreement, considering the contract as a whole. A good starting point for considering the meaning of individual terms is the Oxford English Dictionary, which defines 'war' as "a state of armed conflict between different countries or different groups within a country." Similarly, Osborn's Concise Law Dictionary 12th ed. describes it as "the legal categorisation of the state of affairs existing between states when force is used to vindicate rights or settle disputes between them."
The meaning of the term 'war' has been considered in a handful of cases by English courts.
Janson v Driefontein Consolidated Mines Ltd [1900] 2 Q.B. 339
Here the court was considering the insurance of a shipment of gold owned by a Transvaal company that was seized by Transvaal just prior to the outbreak of the Boer War. At first instance, the court wrote:
"What is a state of war is well described in Hall on International Law, 4th ed. p. 63: "When differences between States reach a point at which both parties resort to force, or one of them does acts of violence, which the other chooses to look upon as a breach of the peace, the relation of war is set up, in which the combatants may use regulated violence against each other until one of the two has been brought to accept such terms as his enemy is willing to grant."
The question arising was whether it was against public policy for British insurers to pay an indemnity for the seizure of the gold where that gold was used by the Transvaal government to fund the war against Great Britain. The House of Lords ultimately found that the seizure had occurred prior to the outbreak of war, that nothing in public policy should prevent payment under the policy after the restoration of peace, and that therefore the terms of the policy should be given force and indemnity paid.
Kawasaki Kisen Kabushiki Kaisha of Kobe v Bantham Steamship Co Ltd [1939] 2 K.B. 544
In this case, the defendants sought to enforce a term in a time charterparty that allowed it to be cancelled "if war breaks out involving Japan". They sought to do so in September 1937, after the conflict between China and Japan had escalated dramatically following the Marco Polo Bridge Incident on 7 July 1937.
The matter was first referred to arbitration. The claimant argued that there was no declaration of war between Japan and China, that the countries had not severed diplomatic ties and that the British government did not recognise a state of war between the countries (the parties in the case did appeal to the Foreign Office, who said essentially that the government did not want to take a view on whether there was or wasn't a war).
The arbitration umpire found that, despite the lack of a formal declaration of war, a war had broken out between China and Japan by September 1937. He noted that the armies on both sides of the conflict numbered in the hundreds of thousands and that their forces included aeroplanes, tanks and heavy artillery. He concluded that the conflict constituted a war within the ordinary and popular meaning of the word.
The High Court found similarly that the word should be construed in the sense in which an ordinary commercial man would use it, rather than seeking to go into the niceties of international law.
The Court of Appeal were even more forceful, stating that "[T]his is a clear case" and "I cannot imagine any commercial person with any common sense answering that question [i.e. whether it was a 'war'] in any way other than that in which the arbitrator has answered it." The court made clear that a war could break out without a formal declaration of war, without the severing of diplomatic ties between the belligerents and regardless of the UK government's view on the matter.
Spinney's v Royal Insurance [1980] 1 Lloyd's Rep. 406
The insureds owned and carried out three businesses in Beirut, Lebanon. They took out insurance for their properties in 1975 on an all-risks basis, with exclusions for several political violence (PV) perils. The businesses were damaged during the widespread political strife in Lebanon beginning in late 1975 / early 1976. Underwriters refused to pay arising claims on the basis that the PV exclusions applied.
The court in this case was not required to consider the meaning of 'war'. However, it did discuss the meaning of 'civil war'. The court assessed that a civil war should be fought between identifiable 'sides', that those sides should have the object of retaining or seizing dominion of whole or part of a state, and that the "nature and scale of the conflict" should be assessed, with factors such as the number of combatants, the number of casualties (both civilian and military), the number and nature of the armaments employed, the size of the territories held by each side, the involvement of broader populaces, the duration of the conflict and the extent to which public order and the administration of justice were impaired.
The court concluded, after considering the facts of the conflict and applying the above tests, that in January 1976, Lebanon was not in a state of civil war.
Analysis
As the case law demonstrates, English courts will approach the meaning of “war” through the lens of ordinary commercial understanding, informed by the scale, organisation and objectives of the violence in question, rather than by how the parties to a conflict choose to characterise it. In an era of asymmetric warfare, proxy actors and rapid escalation across borders, that analysis is likely to become increasingly fact sensitive and contested.
For policyholders and insurers alike, the lesson is clear. The classification of losses arising from the current Middle East hostilities will depend heavily on precise policy wording and careful assessment of how exclusions, buy backs and aggregation provisions interact. Early engagement, rigorous review of coverage terms and a clear-eyed assessment of the factual matrix will be essential in navigating claims and preserving rights as the situation continues to evolve.
