Insurance policies are meant to protect against accidental and, typically, spontaneous events. Intentional or deliberate actions that cause damage or injury do not usually qualify for coverage. While an insured having control over an act which causes loss or injury usually is grounds for exclusion, there are exceptions such as:
- Actions of a minor or other legal incompetent
- Damage or injury involving self-defense or protecting another party or property
- The existence of innocent insureds
The reason for exceptions is to make fair allowances for permitting an insurance policy to respond to losses when justified by circumstances.
Innocent insured situations exist when, under a given insurance policy, coverage may be allowed because a guilty party is accompanied by at least one other party who is free of involvement with the injury or damage.
Innocent insureds are usually spouses, resident relatives, co-owners, partners, employees and/or other parties who have an insurable interest in some covered property or share a legal responsibility with a guilty party. The relationship between the guilty and innocent parties tends to be very close.
One issue that is vitally important regarding innocent insureds is that, generally, any compensation usually is due to judicial decisions rather than how an insurance policy is applied. This is the case because insurance companies rely on “imputing.”
Simply put, imputing means that no consideration is provided to uninvolved parties. Insurance companies typically attribute actions involving one insured person to all other insured persons affected by a policy. This assumption ignores the question of individual innocence. However, courts often review particular loss circumstances and rule upon whether such assumptions of guilt are fair. There are many instances of decisions where an insurance company is ruled to have a separate payment obligation to innocent insureds.
It is important that both insurance companies and insurance consumers be aware of the intent to provide coverage. Policies are obligated to protect persons who suffer legitimate claims, even when determining the coverage obligation is complicated.
COPYRIGHT: Insurance Publishing Plus, Inc., 2016
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