Force Majeure
Written by Justin Goodman, CIC, CLCS, CISC, CEO and Co-Founder, Total CSR
Published: September 15, 2026 · Last reviewed: September 15, 2026
In plain language: Force majeure is a contract provision that lets a business skip or delay a promise when something extreme and unforeseeable, like a hurricane, war, or government shutdown order, makes doing the job impossible. It protects businesses from being sued for breach of contract when the event was truly out of their hands.
Technical definition: Force majeure is a contractual clause, not an insurance policy provision, that suspends or excuses a party's contractual duties upon the occurrence of specified extraordinary events. It appears in leases, service agreements, and construction contracts. Courts enforce it narrowly, based on the exact events the contract lists.
Force Majeure at a Glance
| Attribute | Detail |
|---|---|
| Also known as | Act of God clause, superior force clause |
| Category | Contract clause, not an insurance coverage grant |
| Lines of business | Commercial Property, Business Interruption, Event Cancellation, CGL |
| Industries most affected | Construction, manufacturing, event planning, hospitality, transportation |
| Who bears the risk | The contracting parties, allocated by the specific wording they negotiate |
| Common solution | Business interruption insurance, civil authority coverage, contingent business interruption endorsements |
| Also interacts with | Impossibility of performance doctrine, frustration of purpose doctrine, named peril property policies |
Key Takeaways
- Force majeure is a contract clause, negotiated between private parties, that excuses performance when a listed extraordinary event occurs, and it is not a standard insurance policy term.
- Agencies matter here because clients often confuse a force majeure clause in a vendor contract with actual insurance coverage, leaving a real financial gap during a covered loss event.
- The most common pitfall is assuming force majeure automatically triggers an insurance payout; a policy only pays if the specific peril is named or the trigger conditions of an endorsement are met.
- A quick win for agencies is to review a commercial client's key contracts alongside their property and business interruption policy to spot where contractual excuses do not match actual risk transfer.
What Is Force Majeure in Insurance?
Force majeure is a clause found in commercial contracts, not in most insurance policies, that lists specific extraordinary events, such as war, natural disaster, labor strikes, or government action, which excuse a party from performing its obligations. Courts developed this concept because contract law generally holds parties strictly to their promises regardless of hardship. Force majeure gives negotiated relief when performance becomes impossible or commercially senseless due to events outside anyone's control.
The clause exists because pure contract law offers little flexibility. Without it, a supplier who cannot deliver goods because a port shut down during a pandemic could still face a breach of contract lawsuit. Force majeure lets parties agree in advance on which catastrophic events will pause or cancel obligations, and it shifts the financial consequence of that pause onto whichever party the contract designates.
A general contractor signs a agreement to complete a retail buildout by a fixed date. A regional wildfire forces a countywide evacuation order for three weeks, halting all site access. If the construction contract contains a force majeure clause listing government-ordered evacuations, the contractor's completion deadline extends without penalty. Without that clause, the contractor could be liable for late-completion damages despite having no ability to work.
Insurance rarely uses the term force majeure directly. Property and business interruption policies instead rely on named perils, all-risk language, and specific endorsements like civil authority coverage to determine what financial losses are actually paid. Agencies need to help clients understand that a force majeure clause in a lease or vendor contract does not create insurance money; it only pauses a legal obligation between two private parties.
How Does Force Majeure Work?
- The triggering event. An extraordinary occurrence happens, such as a hurricane, war, epidemic, or government shutdown order, that falls within the categories the contract specifically lists.
- The notice. The affected party notifies the other contracting party, usually within a deadline set in the clause, that it intends to invoke force majeure and cannot perform as scheduled.
- The causation link. The invoking party must show the event actually prevented performance, not merely made it inconvenient or less profitable; courts scrutinize this connection closely.
- The suspension or termination. Depending on the clause wording, the contract obligations pause temporarily until the event ends, or the contract terminates entirely if the disruption exceeds a stated time limit.
- The insurance question. The business separately checks its property, business interruption, or event cancellation policy to see whether the same event triggers an actual claim payment, since the contract clause and the insurance policy operate independently.
Real Claim Examples Involving Force Majeure
Event venue cancellation during a hurricane evacuation
A wedding venue's rental contract with a couple included a force majeure clause listing hurricanes and mandatory evacuation orders. When a Category 3 storm forced a coastal evacuation on the event date, the venue invoked the clause and returned the deposit without breach liability. The couple then filed a separate claim under their event cancellation insurance policy, which paid for the nonrefundable vendor deposits the venue's contract did not cover, showing how the contract clause and the insurance policy solved two different problems.
Manufacturer supply contract during a pandemic shutdown
A parts manufacturer's supply agreement contained a force majeure clause covering government-ordered facility closures. State health orders shut the plant for six weeks, and the manufacturer invoked the clause to avoid late-delivery penalties owed to its buyer. The manufacturer's own business interruption policy, however, denied the related claim because the policy excluded losses from communicable disease, leaving a real revenue gap the contract clause never addressed.
Construction delay from a labor strike
A commercial general contractor's project contract listed labor strikes as a qualifying force majeure event. A regional trucking strike delayed material deliveries for five weeks, and the contractor successfully invoked the clause to extend the project deadline without paying liquidated damages to the owner. No insurance claim applied here at all, since delay from a labor dispute is a scheduling issue between contracting parties rather than a covered property or liability loss.
Force Majeure vs. Civil Authority Coverage: What Is the Difference?
Force majeure is a contract clause negotiated between private parties, while civil authority coverage is an insurance policy provision, typically an extension of business interruption coverage, that pays for lost income when a government order restricts access to a client's property. Both can be triggered by the same underlying event, such as a government evacuation order, but they operate in entirely separate legal frameworks with different payers and different proof requirements.
| Comparison area | Force Majeure | Civil Authority Coverage |
|---|---|---|
| Primary use case | Excusing contract performance between two private parties | Paying lost business income from a government-ordered access restriction |
| Coverage / concept type | Contract law doctrine, negotiated clause language | Insurance policy extension, usually under business interruption |
| Typical exclusions | Events not specifically listed, mere hardship or unprofitability | Damage to property not within a specified distance of the insured location, absence of direct physical loss nearby |
| Who is most affected by errors | Contracting parties who assumed the clause meant financial reimbursement | Insureds who assumed civil authority coverage applies to any government order regardless of proximity |
| Common mistakes | Treating a broadly worded clause as automatically enforceable | Filing a claim without proof that a covered property nearby suffered direct physical loss |
What Are the Most Common Mistakes With Force Majeure?
- Assuming a force majeure clause guarantees an insurance payout: the clause only excuses a contractual duty, and it creates no obligation for a carrier to pay anything.
- Relying on generic "boilerplate" force majeure language that does not list the specific event a client actually faced, which courts may then refuse to apply.
- Failing to review whether the clause requires timely written notice, since many clauses void the excuse entirely if the invoking party misses the notice deadline.
- Confusing force majeure with the doctrine of impossibility of performance, which is a common-law fallback that applies even without a written clause but under a much stricter legal standard.
- Advising a client that pandemic-related shutdowns are automatically covered events without reading the exact listed triggers, since many older clauses never contemplated epidemics or disease.
- Overlooking that force majeure clauses vary enormously by industry and jurisdiction, so a clause reviewed for one client's lease cannot be assumed to work the same way in another contract.
How to Explain Force Majeure to a Client
Explaining Force Majeure to a personal lines client
Force majeure usually shows up in things like wedding contracts, rental leases, or vacation bookings rather than in your home or auto policy. Think of it as a pause button between you and a vendor when something huge and unexpected happens, like a natural disaster. It does not put money in your pocket by itself, so we still look at your actual insurance policy to see what pays for your loss.
Explaining Force Majeure to a small business owner
Force majeure is the clause in your vendor and customer contracts that lets everyone off the hook temporarily when something catastrophic and outside anyone's control happens. It protects you from being sued for breach of contract, but it does not replace your business interruption insurance, which is the policy that actually reimburses your lost income. We want both pieces working together, not one substituting for the other.
Explaining Force Majeure to a CFO or risk manager
Force majeure allocates contractual risk between you and your counterparties when extraordinary events disrupt performance, and its enforceability depends entirely on the specific triggering events your legal team negotiated into the clause. It has no bearing on your carrier's payment obligations under your property, business interruption, or contingent business interruption coverage. We recommend a coordinated review where legal maps your key contract clauses against the actual perils and triggers in your insurance program, so you can identify gaps before a loss forces the issue.
Frequently Asked Questions About Force Majeure
Does force majeure cover a pandemic?
Coverage depends entirely on whether the specific contract lists pandemics, epidemics, or disease outbreaks as a qualifying event. Many older clauses drafted before 2020 never contemplated disease and courts often refused to stretch general language like "acts of God" to cover it. Newer contracts increasingly name pandemics explicitly after that experience.
Is force majeure the same as an insurance exclusion?
Force majeure and an insurance exclusion are different legal tools entirely. Force majeure is a contract clause between two private parties that pauses or cancels obligations, while an insurance exclusion is policy language that removes a specific cause of loss from what a carrier agrees to pay. A single event can trigger a force majeure clause in a contract while simultaneously being excluded, included, or untouched under a separate insurance policy.
Can a business buy insurance for force majeure risk?
A business cannot buy a standalone "force majeure insurance" policy, since force majeure is not itself an insurable risk category. Businesses instead purchase business interruption insurance, contingent business interruption coverage, or event cancellation insurance, each of which uses its own named perils and triggers that may or may not overlap with a contract's force majeure list.
What happens if a contract has no force majeure clause?
Courts may apply the common-law doctrine of impossibility of performance or frustration of purpose as a fallback, but these doctrines set a much higher bar than a well-drafted force majeure clause. A party without the clause generally must prove performance became truly impossible, not just difficult or expensive, which is a harder standard to meet.
Does force majeure excuse payment obligations too?
Most courts interpret force majeure clauses to excuse the performance of services or delivery of goods, but many jurisdictions refuse to apply them to excuse pure payment obligations, on the theory that a shortage of money is rarely an event truly outside a party's control. The exact wording of the clause and the governing jurisdiction both matter heavily here.
Should agencies review force majeure clauses in client contracts?
Agencies are not providing legal advice when they flag contract clauses, but a proprietary pattern Total CSR sees across CSR training assessments is that account managers routinely skip reading vendor and lease contracts entirely, assuming coverage questions live only in the policy. Building a habit of asking commercial clients for their key contracts during renewal reviews surfaces real coverage gaps between what a contract assumes and what the policy actually pays.
Related Insurance Terms
- Act of God: a legal term for natural events like earthquakes or floods that occur without human involvement, often listed as one specific triggering event within a broader force majeure clause.
- Business Interruption Insurance: a policy that reimburses lost income and continuing expenses when a covered peril forces a business to suspend operations, operating independently from any force majeure clause in the business's contracts.
- Civil Authority Coverage: an extension of business interruption insurance that pays for lost income when a government order restricts access to insured property, often triggered by the same event that activates a force majeure clause.
- Impossibility of Performance: a common-law contract doctrine that excuses performance when an unforeseen event makes it truly impossible, serving as a fallback when a contract lacks a force majeure clause.
- Named Peril Policy: an insurance policy that pays only for losses caused by perils specifically listed in the policy, similar in structure to how a force majeure clause only excuses performance for specifically listed events.
- Frustration of Purpose: a contract law doctrine that excuses performance when an unforeseen event destroys the entire reason the contract was formed, even if performance remains technically possible.
Sources and References
- Legal Information Institute, Cornell Law School. Force Majeure.
About the Author
Justin Goodman, CIC, CCIP, CISC, CLCS, CRIS, PCIA, QCLS, MFHR CEO and Co-Founder, Total CSR, Inc.
Justin Goodman is a third-generation insurance broker with over two decades in agency operations. He has trained more than 100,000 CSRs, account managers, and producers in commercial and personal lines coverage, from workers' compensation to construction risk. He was named 2024 Insurance Journal Agent of the Year and one of the nation's top five construction insurance experts by Risk & Insurance. He is the author of Retain, which applies cognitive science research on memory and knowledge transfer to insurance training, and speaks nationally on how agencies build durable technical expertise in their teams.