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When reviewing exclusion clauses, it is important not to forget that:
• Ambiguity in the exclusion is usually construed against the drafting party.
• In the event of a claim, the reinsured has the burden of proving that the loss suffered is within the
scope of the treaty whereas it is the reinsurer who has the burden of proving that the loss falls within a
particular exclusion.
• Local law may apply to restrict what may or may not be excluded from certain contracts.

In this section, we outline those exclusions that are common to all forms of proportional and non-
proportional treaty reinsurance:

information technology
insolvency fund reinsurance assumed
exclusion clause hazards clarification
clause

Common treaty exclusions

pollution (or environ-
nuclear exclusion war and terrorism other
clauses mental contamination) exclusion clauses
exclusion clauses

Exclusions that are specific to property, casualty, marine and aviation reinsurance are discussed in
chapters 10, 11 and 12.

E1 Nuclear exclusion clauses
These clauses exclude liability for nuclear risks. Such risks are not considered insurable by conventional
These clauses
exclude liability for means, and are typically the subject of pooling arrangements. They remain, however, of concern to
nuclear risks reinsurers following the break-up of the Soviet Union, general nuclear proliferation and, more recently, Reference copy for CII Face to Face Training
the possibilities for nuclear terrorism, because of the potential for catastrophic loss.
Non-marine reinsurance
Here, it is usual to include the following suite of clauses (as appropriate):
7 • Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – USA (NMA 1119);
Chapter • Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – Canada (NMA 1980a);
• Nuclear Incident Exclusion Clause – Physical Damage and Liability (Boiler and Machinery Policies) –
Reinsurance – USA (NMA 1166);

• Nuclear Incident Exclusion Clause – Physical Damage and Liability (Boiler and Machinery Policies) –
Reinsurance – Canada (NMA 1251);
• Nuclear Incident Exclusion Clause – Liability – Reinsurance – USA (NMA 1590);
• Nuclear Incident Exclusion Clause – Liability – Reinsurance – Canada (NMA 1979a);
• Nuclear Energy Risks Exclusion Clause (Reinsurance) (1994) (Worldwide excluding USA and Canada)
(NMA 1975a).

In this way, the reinsurance contract seeks to exclude any loss or liability accruing to the reinsured,
directly or indirectly and whether as – first or third party – insurer or reinsurer, from any pool of insurers
or reinsurers formed for the purposes of covering nuclear energy risks.

The NMA 1975a concerns cover for potential damage to nuclear power plants and other nuclear
installations as well as to liability claims resulting from the operation of such nuclear installations or
from the utilisation, storage and transport of nuclear material including waste.