War Damage Insurance Australia 2025: Coverage, Trends & Essentials

Australia’s insurance landscape is evolving rapidly in response to an increasingly volatile global environment. While many Aussies are familiar with standard property and business insurance, war damage insurance remains a niche but critical product—especially for those with international exposure or high-value assets. As 2025 unfolds, with fresh geopolitical tensions and a shifting regulatory scene, it’s time to revisit what war damage insurance covers, who needs it, and the latest updates affecting Australians.

What Is War Damage Insurance?

War damage insurance is a specialised policy designed to protect assets against losses resulting directly from acts of war, invasion, civil war, insurrection, rebellion, or terrorism. Unlike standard insurance policies—which almost always exclude war-related risks—this coverage steps in where others don’t.

• Commercial properties: Warehouses, factories, and office towers in high-risk zones
• Critical infrastructure: Ports, logistics hubs, and energy installations
• International supply chains: Businesses relying on overseas manufacturing or shipping routes

Standard home and contents insurance in Australia rarely, if ever, covers damage caused by acts of war. For businesses and certain property owners, particularly those operating in sensitive regions or with international operations, war damage insurance fills a vital gap.

Why Is War Damage Insurance Relevant in 2025?

Recent years have seen a marked increase in regional instability, cyber-warfare, and global supply chain disruptions. In 2025, several developments have sharpened the focus on war damage insurance:

• Geopolitical tensions: Ongoing disputes in the Asia-Pacific region have prompted Australian exporters and importers to review their risk management strategies.
• Cyber-attacks: While not always covered under traditional war damage policies, new hybrid policies now address cyber-terrorism and politically-motivated cyber events.
• Regulatory updates: The Australian Prudential Regulation Authority (APRA) in early 2025 issued new guidelines for insurers underwriting war risks, aiming to improve policy transparency and ensure adequate capital reserves.

One real-world example: In late 2024, an Australian logistics firm operating in Southeast Asia faced substantial losses after port infrastructure was damaged during a regional conflict. Their war damage policy, updated just months prior, covered millions in repairs and business interruption—a financial lifeline that standard insurance would not have provided.

Key Features and Limitations

War damage insurance isn’t a one-size-fits-all product. It’s typically tailored to the insured’s risk profile, industry, and geographic exposure. Here are some features and limitations to be aware of in 2025:

• Customisable coverage: Policies can include physical damage, business interruption, and even contingent risks (e.g., damage to suppliers’ premises).
• Exclusions: Civil commotion, riots, or strikes may not be covered unless specifically added. Nuclear, chemical, and biological attacks often remain excluded or require separate endorsements.
• Premium costs: Pricing has increased in 2025, reflecting heightened global risks and stricter reinsurance requirements. Expect premiums to vary based on location, industry, and claims history.
• Claims process: Insurers now demand clearer documentation and evidence due to the complex nature of war-related claims. New APRA guidelines have standardised reporting requirements, making the process more transparent but also more rigorous.

If you’re in construction, logistics, or energy—or your business relies on assets located in politically unstable regions—review your existing insurance portfolio. Engage with a specialist broker to explore whether war damage cover is appropriate for your risk profile.

How to Decide if You Need War Damage Insurance

Not every Australian business or property owner needs war damage insurance. Consider these questions:

• Do you operate in or trade with countries facing civil unrest or military conflict?
• Would your business suffer catastrophic losses if a war event halted operations or destroyed critical assets?
• Are your contracts with overseas partners requiring proof of war risk coverage?

For many, the answer will be ‘no’—but for those with significant exposure, the peace of mind and financial security offered by war damage insurance can be invaluable. In a year marked by unpredictability, proactive risk management is more important than ever.