Public Strike Losses Excluded from Insurance Coverage

The Insurance Development and Regulatory Authority (IDRA) has issued a pivotal directive clarifying that losses arising from “public strikes” or mass civil sit-ins will not be covered under non-life insurance policies. The instruction was formally communicated to the state-owned Sadharan Reinsurance Corporation (SRC) on 4 January 2026.

SRC, the country’s sole reinsurance entity, had previously resolved during its board meeting on 3 March 2025 that damages caused by public strikes should not fall within standard insurance policies. The meeting, attended by representatives of private insurance companies and survey agencies, did not, however, establish detailed procedures for claims handling or settlement.

Industry experts note that, in line with international practice, civil unrest-related losses—including those stemming from strikes or mass demonstrations—are generally excluded from insurance coverage. Legally, if the “primary cause” of a loss is identified as a public strike, the claim is considered inadmissible. Standard Fire Insurance policies and Industrial All Risks (IAR) policies similarly exclude coverage for damages resulting from civil disturbances.

The IDRA directive explicitly requires all non-life insurers to refrain from recognising claims attributed to public strike-related losses. Companies are instructed to engage licensed insurance surveyors to assess the extent of any damage and to act on the findings of these reports.

Experts have cautioned that this directive may complicate the resolution of claims arising from the nationwide strikes of July–August 2024. Reliance on survey-based verification could delay settlements and increase the risk of fraudulent claims.

A senior official at SRC confirmed, “We have received IDRA’s directive. The matter will be deliberated at the board level, and a formal decision will follow. Our previous policy was based on interpretations of the Insurance Act and relevant regulations.”

A summary of public strike-related insurance coverage is presented in the table below:

Under Section 127(1) of the Insurance Act 2010, only licensed insurance surveyors are authorised to assess or coordinate non-life insurance losses. Non-compliance can result in financial penalties for both individuals and institutions.

Analysts suggest that while IDRA’s directive provides a firm legal basis, it may trigger debate over the fairness and transparency of claims settlements. Non-life insurers will now be required to meticulously collect and verify evidence for each claim, a process that could have long-term implications for the country’s insurance sector.