The Emergency Risks (Goods) Insurance Act, 1971, was enacted during the Indo-Pak War of 1971, a period marked by heightened national security concerns and economic instability. The war, triggered by the Bangladesh Liberation Movement, led to the imposition of a national emergency under Article 352 of the Indian Constitution on December 3, 1971. During such crises, businesses faced significant risks from enemy actions, including bombings, sabotage, and supply chain disruptions. To mitigate these risks and ensure economic continuity, the Indian government introduced this Act as a temporary measure to provide insurance coverage for goods against war-related damages.
The Act was inspired by similar wartime insurance schemes globally, such as the UK’s War Risks Insurance Act during World War II. Its primary objective was to protect traders, suppliers, and manufacturers from financial losses due to war-induced damages, thereby stabilizing commerce during the emergency period.
Economic Stability: Provided a safety net for businesses during wartime, preventing collapse of supply chains.
Government as Insurer: Unique state intervention to absorb war risks, reducing private sector vulnerability.
Temporary Measure: Aligned with the emergency period, ensuring no long-term fiscal burden.
The Act lapsed after the emergency but set a precedent for state-backed insurance during crises. Similar principles were later adapted for disaster management and pandemic-related economic relief schemes.

The 1971 Act was a strategic response to wartime economic challenges, blending compulsory insurance with central oversight to safeguard commerce. It underscored the government’s role in mitigating extraordinary risks, leaving a blueprint for future crisis management frameworks.