It is fundamental to insurance that the loss the policy covers (whether damage the insured suffers, or damage someone else suffers for which the insured is liable) is accidental from the insured’s point of view.

The standard odds must apply. The pricing is based on it. The insurer does not wish to insure a risk that presents odds stacked against it (called ‘being selected against ‘) or worse, that is certain. These are no longer insurable risks as the insurer chances insolvency.

The requirement for the loss to be accidental is not to be confused with the act that led to the loss. Many deliberate acts result in accidental losses. Some liability policies exclude liability arising from a deliberate act. How is this to be interpreted? Is the policy really confined to cover for accidental acts resulting in accidental losses only?

This issue went all the way to the UK Supreme Court in a recent decision. We provide commentary about it here.

Keegan Alexander