Animal attack coverage under property insurance:
Animal attacks can take various forms:
👉In one factory, rodents chewed through the wires causing short-circuiting and breakdown of an electric motor.
👉A troop of monkeys entered a factory and caused damage to the stocks lying in the warehouse.
👉A monkey fell on a live transformer causing arcing and damage.
Under property insurances that are on a named basis, such as standard fire and special perils policy, the animal attack is not a named peril. Hence the above situations are not covered. There can be an argument that the policy covers the impact of animals. But, animals chewing wires or clawing into insured property causing loss or damage are not impact damage. However, falling of animals over a property causing damage can be considered as impact damage and hence covered.
In respect of all risk policies such as Industrial All Risks policies, there is no specific exclusion for animal attack. However, the causation has to be sudden (not gradual) and accidental. Since the chewing of wires by rodents is not sudden and could happen over some time, the gradual damage exclusion of the policy would become applicable. However, attacks by monkeys or falling of animals over property causing damages are neither gradual nor specifically excluded under IAR policy, so they stand covered.
Another consideration in case of animal attacks is of proximate cause. While animal attacks such as rodents chewing through wires may not be directly covered, there can be ensuing damage that may be covered. If there is a breakdown of machinery following rodent attack, under an IAR policy, the same is covered as the proximate cause is a breakdown, not a rodent attack.
The key consideration in animal attacks therefore is to see the nature of loss that occurred, in the circumstances in which it occurred.
