Business interruptions linked to the Middle East war have emerged, according to claims services group Crawford & Company.

Crawford is seeing early BI notifications and enquiries for which the trigger is disruption, not damage.

“Australian premises may be untouched, but businesses can feel an immediate hit to trading when movement and supply constraints emerge, particularly through freight delays, route changes and sudden input volatility,” national executive adjuster and head of class actions Graham Peters said.

“This can also show up in event-related exposures when people and cargo can’t move cleanly, touring productions and equipment can get stranded mid-transit.”

In situations where there is no property damage, insureds often look to BI extensions such as supplier or dependency-style cover.

However, exclusions are typically drafted broadly to deny cover for losses directly or indirectly caused by war, hostilities, terrorism or actions taken in response to those perils.

“The catch is that standard BI triggers are often built for physical damage scenarios and are not written to respond cleanly to that type of disruption, particularly where war-related causation or exclusions are in play,” Mr Peters said.

He says war risk cover can be bought, but it is expensive and rarely taken up in Australia because the risk has historically been seen as remote.

Crawford has also noted war-related impacts on the construction sector.

Australian president Jonathan Hubbard says early market feedback points to price increases of up to 15% for some inputs.

“Construction claims are already dealing with a sticky cost base and tight repair capacity, which tends to push out time frames and increase variability in quotes,” he said. “Layer on fuel and petrochemical pressure and you can see flow-through into freight and plastics-based building products.

“Subcontractors, many of which are heavy diesel users, will try to pass on additional costs, though it’s still early and hard to pin down where it lands.”