Part 4: Conditions, Triggers & Claim Pitfalls in AFB 1–8 Coverage

Part 4: Conditions, Triggers & Claim Pitfalls in AFB 1–8 Coverage

Demystifying the AFB 1–8 Series — Part 4 of 5 - Read parts 1, 2 & 3 here

Disclaimer: This article 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 policy.

This series is based on the AFB 1–8 political violence wording, a widely used template in the Lloyd’s and specialty markets. Other wordings — such as Hiscox 1–5 — follow similar structures, but our analysis here uses AFB 1–8 as a reference point.

In political violence insurance, the fine print matters just as much as the front page — especially when chaos escalates faster than coverage.

The biggest threat to your claim isn’t the crisis — it’s the small print.

Political violence insurance is a powerful tool. But it’s also a tightly worded contract. Even when the right peril is triggered, policies can be voided or claims reduced if key conditions aren’t met.

In this post, we explore the operational clauses, claim triggers, and pitfalls that brokers, risk managers, and insureds need to keep front of mind — before the crisis hits.

⏱️ Notification Obligations: Timing is Everything

AFB 1–8 includes strict notification requirements. The insured must:

• Notify the underwriter as soon as practicable after an event that may give rise to a claim

• Provide full details of the loss, including cause, timing, and nature of the damage

• Cooperate fully with adjusters and any appointed representatives

Missed deadlines or delayed notification can jeopardize recovery — especially if the peril itself is unclear or disputed.

🧾 Due Diligence and Reasonable Care

Clause 5.2 of the wording requires the insured to:

“Take all reasonable precautions to prevent loss, destruction or damage and comply with all legal requirements and manufacturers’ recommendations relating to the use and security of the property.”

In practice, this means:

• Security protocols must be maintained

• Vacant buildings must be secured

• Sites in high-risk zones must follow local laws and curfews

A failure to take basic precautions — even unrelated to the cause of loss — may be grounds for reduced settlement or declinature.

🔄 Cooperation Clause: No Room for Withholding Info

Clause 5.3 requires full cooperation, including:

• Allowing access for underwriters, loss adjusters, and investigators

• Providing records, receipts, and asset registers

• Notifying police or government authorities where applicable

Lack of transparency or delays in cooperating can seriously damage your claim position.

💡 Key Triggers That Must Be Met

Remember: political violence cover only responds when the peril is listed and triggered. AFB 1–8 does not use vague “all-risk” language. The burden is on the insured to prove:

• A listed peril caused direct physical loss or damage

• The damage occurred during the policy period

• The location was insured and the asset properly declared

⚠️ Common Claim Pitfalls

Even with the right cover, these factors frequently reduce payouts or void recovery:

Pitfall	Impact
Undeclared locations or assets	No cover applies — AFB 1–8 only insures what’s listed in Schedule 2
Inadequate declared values	Partial recovery — the declared values penalty (co-insurance clause) applies
Wrong peril selected	No trigger, no payout — e.g., riot instead of sabotage
Improper documentation	Delays in settlement or dispute over loss size
Suppression damage misunderstood	Damage caused by military suppression only applies to Terrorism/Sabotage events — not riots, rebellions, or war
Ambiguous cause of loss	If the event escalates (e.g., from riot to rebellion), proximate cause becomes critical — and sometimes unprovable

🧱 The Escalation Problem: Perils Aren’t Always Clear-Cut

AFB 1–8 treats each peril as distinct. But real-world events often evolve rapidly:

What begins as Malicious Damage (Peril 4) might become an Insurrection (Peril 6), or lead to a Counter-Insurgency response (Peril 8).

If coverage is limited to Perils 1–3, claims for subsequent damage could be declined — even when the event feels connected.

This is why purchasing a broader set of perils — or at minimum SRCC — is often a smarter long-term strategy.

✅ Best Practices for Risk Managers and Brokers

• List all locations and assets clearly in Schedule 2

• Choose perils intentionally — don’t just opt for the minimum

• Update declared values annually

• Implement loss prevention protocols and document them

• Train site teams to escalate incidents early and capture evidence

• Understand the notification and documentation timeline

• Engage early with your broker or underwriter when in doubt

🔚 Coming Next: Part 5 — Reimagining the Political Violence Product

Our final post will explore:

• What’s missing from the traditional product

• Where insureds are underserved

• How data, flexibility, and intent-based coverages could reshape the market

The best time to learn your policy isn’t when a crisis hits. It’s now.

Understanding your conditions and triggers is just as important as selecting the right peril.

Stay Resilient