War risk insurance provides coverage that can be used in case of acts of terror and war. Businesses can sometimes purchase this type of insurance in order to mitigate against the unlikely event of war or terrorist attacks.

Most traditional forms of property insurance or business insurance do not cover war risks. If you do not purchase war insurance and an act of war destroys one of your buildings, your insurance coverage will most likely not cover the incident. This could be a catastrophic circumstance for the business, as it would no longer have a building and no insurance to cover it.

Aviation companies are the primary purchaser of this type of insurance coverage. Airlines need this type of coverage to protect themselves against financial losses from terrorist attacks. After the events of September 11, 2001, this type of insurance was temporarily placed on hold. Then the government stepped in and created a type of terrorist insurance program that can be used by airlines. 

With this type of coverage, the premiums are generally reasonable because the likelihood of this type of event is very low when compared to some of the other catastrophes that could occur.

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