Part 2: The 8 Perils Explained — What Terrorism & Political Violence Insurance Actually Covers

Demystifying Political Violence Insurance: The AFB 1–8 Series — Part 2 of 5 - Missed part 1? Read it here

Disclaimer: This blog is for educational purposes only and does not constitute legal or insurance advice. Coverage is subject to the specific terms, conditions, and exclusions of each individual policy.

This series is based on the AFB 1–8 political violence insurance wording, widely used in the Lloyd’s and specialty market. Other forms — such as Hiscox 1–5 — exist, but we’re using AFB 1–8 as our reference point for clarity and consistency.

Do you know the difference between sabotage and terrorism? A riot and a rebellion?

Most businesses assume that if they have “terrorism insurance,” they’re covered. But under the AFB 1–8 political violence wording, terrorism is just one of eight critical perils — and each one responds to a very different type of event.

If you’re not clear on what these perils actually mean, you could be unintentionally exposed to major uninsured risks.

In this post, we’re breaking down all 8 perils covered under AFB 1–8 — with practical explanations, real-world scenarios, and why each matters for business resilience.

🔥 1. Act of Terrorism

Acts committed for political, religious, or ideological purposes — usually involving violence — designed to influence a government or intimidate the public.

Example: A car bomb explodes near a consulate building.

✅ Why it matters: Coverage depends on proving political intent — not just destruction.

🧨 2. Sabotage

Deliberate, politically motivated damage — often covert — aimed at disrupting operations or infrastructure.

Example: A pipeline is blown up by separatist militants in a rural region.

✅ Why it matters: Sabotage isn’t always visible — but can be just as costly.

👥 3. Riots, Strikes and/or Civil Commotion (SRCC)

Disorderly gatherings or labor protests that escalate into property damage or disruption.

Example: A supermarket is looted during mass demonstrations over election results.

✅ Why it matters: SRCC is often excluded from traditional property insurance, especially in emerging markets.

🪧 4. Malicious Damage

Politically motivated destruction of property during a public disturbance — even when the attackers are unidentified.

Example: Protesters vandalize a business district during a political rally.

✅ Why it matters: You don’t need to know who did it — but it must occur during political unrest.

⚔️ 5. Insurrection, Revolution or Rebellion

Organized, armed resistance to state authority — typically by a civilian population or militia group.

Example: Rebels seize a provincial capital and declare autonomy from central government.

✅ Why it matters: This is different from a protest. It’s a sustained, organized effort to challenge power.

🪖 6. Mutiny and/or Coup d’État

An armed overthrow — or attempted overthrow — of the government, usually by military forces.

Example: A faction within the military deposes the head of state and dissolves the constitution.

✅ Why it matters: These events create significant political and legal chaos — and demand precise wording.

🛡 7. War and/or Civil War

Armed conflict between sovereign nations, or between internal factions within a single country, involving sustained military operations.

Example: An armed opposition group wages a campaign against the government, resulting in damage to infrastructure and private assets.

✅ Why it matters:Many property and terrorism policies exclude war entirely — even civil war. AFB 1–8 provides a rare option to include it if specifically purchased, but subject to strict conditions. This peril is critical for businesses operating in conflict-prone states or regions where civil unrest escalates into armed rebellion.

🚨 8. Counter-Insurgency

Military actions by a state to suppress armed rebellion or insurgency.

Example: Armed forces destroy commercial property while targeting guerrilla fighters in the area.

✅ Why it matters: This peril only responds if damage wasn't already caused by perils 1–7 — a commonly misunderstood clause.

Can You Scale Back Coverage? Yes — But Be Strategic

Political violence coverage under AFB 1–8 is flexible. Insureds can choose to purchase only Terrorism and Sabotage, or extend slightly further to include SRCC (Strikes, Riots, and Civil Commotion). This scaled-down approach is common in more stable markets or where cost containment is a priority.

However, when opting to include wider perils—such as Rebellion, Coup d’État, or War—it’s strongly recommended to retain the underlying perils like Malicious Damage, SRCC, and Sabotage. These exposures don’t disappear just because broader political threats are in play.

In real-world scenarios, it’s often difficult to distinguish the proximate cause of a loss when a political event escalates. A demonstration that begins with malicious damage may evolve into an insurrection. A riot may transition into a revolution. If cover for the earlier-stage peril has been stripped out, the claim could be contested or denied.

The most resilient placements treat PV risks as layered and interconnected, not isolated events. Excluding foundational perils to reduce premium may create blind spots just when clarity is most needed

⚠️ A Critical Note for Risk Managers:

You’re not automatically covered for all 8 perils. Under AFB 1–8, coverage applies only to the perils listed in Schedule 1 of your policy.

If it’s not listed, it’s not covered — even if it seems obvious in hindsight.

📊 Why These Definitions Matter More Than You Think

In a volatile world, understanding the language of your policy isn’t optional — it’s essential.

• The wrong peril classification could delay or deny a claim.

• Confusion over definitions could lead to inadequate coverage or underinsurance.

• And assuming all violence is “terrorism” could leave massive operational gaps.

At Resilient Frontiers, we believe that knowing the difference isn’t just about claims — it’s about credibility, continuity, and control.

🔜 Up Next: What’s Covered, What’s Not — And Where the Gaps Are

In Part 3, we’ll dive into the real scope of protection under AFB 1–8 — including buildings, contents, business interruption, government suppression, and the key exclusions risk managers must understand.

✅ Resilience Starts with the Right Language

Don’t let a definition be the reason your claim fails.

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📩 Have a question about your PV wording? Get in touch — we’re here to help translate the fine print.

📥 Download the full series summary (coming soon)

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