1. Forms
2. DL
3. DL-24-08

What the form is

The DL 24 08 01 02, Exclusion of War and Terrorism, is an endorsement to a Dwelling Liability insurance policy. Its primary function is to explicitly remove coverage for liability claims arising from acts of war (declared or undeclared) and acts of terrorism, as defined within the policy or endorsement. This form helps insurers manage their risk exposure to potentially catastrophic and widespread losses that could result from such events.

Classes of business it applies to

This endorsement applies to Dwelling Liability policies. Dwelling policies are typically used for:

• Residential properties not occupied by the owner (e.g., rental properties).
• Owner-occupied dwellings that may not meet the eligibility requirements for a standard Homeowners policy.

Real-world example: If an insured landlord owns a rental property and a terrorist event causes injury to a tenant on the premises, this exclusion, if part of the Dwelling Liability policy, would mean the policy would not cover the landlord's liability for those injuries.

Special considerations

Key considerations for the DL 24 08 include:

• Introduction Context: This type of exclusion became prevalent in the insurance industry following the events of September 11, 2001, as insurers sought to clarify and limit their exposure to terrorism-related risks. The edition date of 01 02 reflects this timing.
• Filing Requirements: Insurers wishing to use this form typically needed to make a separate filing with state insurance departments, sometimes requiring proof of its need. This indicates regulatory oversight regarding the implementation of such exclusions.
• Definition of Terrorism: The specific definitions of "war" and "terrorism" within the policy and endorsement are crucial for determining the scope of the exclusion. These definitions can vary.

Real-world example: After its introduction, insurers had to file this form with state regulators, like in Arizona, to get approval before it could be added to policies.

Key information for agents and underwriters

• Agents: It is critical for agents to clearly communicate the presence and implications of this exclusion to policyholders. Insureds need to understand that their Dwelling Liability coverage will not respond to losses attributed to war or terrorism. Agents should document this explanation.
• Underwriters: For underwriters, this endorsement is a tool for managing catastrophic risk. Its presence standardizes the approach to war and terrorism exposures within the Dwelling Liability line. Underwriters should ensure the form is correctly attached to policies where intended and that its edition date is current and compliant with state regulations. They should also be aware of any state-specific variations or requirements related to terrorism exclusions.
• Coverage Gaps: The exclusion creates a significant coverage gap for war and terrorism perils. While TRIA (Terrorism Risk Insurance Act) and its successors provide a federal backstop for certain certified acts of terrorism in commercial lines, this specific endorsement applies to Dwelling Liability, and its interaction with any potential TRIA implications (if any for this line) would need careful review, though typically these personal lines exclusions are absolute.