It depends who you work for and what your contract stipulates. Life Insurance most of the time excludes acts of war as well. I definitely would not count on it. Why would they pay for services un-rendered? That would not meet the corporatist protections of a binding contract.
While I agree with you, that would go against the foundations of capitalism and the so called free market system if contractors were not able to mark up the tangible assets they sell. Ridiculous? Yes. Unfair to the taxpayers? Absolutely. It is common practice to see at least a 400% markup.