Insurance Law Lesson 57: Business Risks
Insurance policies are to cover accidents. If they covered intentional injury, then insurance would essentially allow people to commit bad acts. In other words, people could do bad things knowing that they would not have to pay for it because, instead, their insurance policies would pay. Thus, insurance covers accidents.
An intentional act that unintentionally injures is accident. Adam intentional flings his arm out while stretching and injures Bob. That’s an accident.
But what about intentional risk taking?
What if Acme Co builds a product out of shoddy materials, or hires an unskilled technician to work on a fancy piece of equipment? The standard Commercial General Liability policy won’t cover the costs to fix or replace the damaged product.
The next few lessons will discuss the “business risk” exclusions – a group of exclusions found in the standard CGL policy that keep businesses on their toes in connection with their work, products, and property in their care.