Fortuity

Post 4723

Liability insurance requires that the loss or damage that needs defense
or indemnity from an insurer, must be contingent or unknown at the time
the policy was acquired. For insurance to apply, on a third party
policy, the risk of loss insured against must be fortuitous. Simply
stated fortuitous means the loss happened by chance. The doctrine of
fortuity (accidental or unintended acts causing injury) requires it be
established that the event was a chance event beyond the control of the
insured. [Martin/Elias Props., 544 S.W.3d at 643 & Blakeley v.
Consol. Ins. Co. (Ky. Ct. App. 2021)]

A "fortuitous event" is defined as: "[A]ny occurrence or failure to
occur which is, or is assumed by the parties to be, to a substantial
extent beyond the control of either party."

Thus, the requirement of a fortuitous loss is a necessary element of
insurance policies based on either an "accident" or "occurrence." The
insured has the initial burden of proving that the damage was the result
of an "accident" or "occurrence" to establish coverage where it would
not otherwise exist [Northville Indus., 89 N.Y.2d at 634).] Once
coverage is established, the insurer bears the burden of proving that an
exclusion applies. [Consolidated Edison Co. v. Allstate Ins., 774
N.E.2d 687, 746 N.Y.S.2d 623, 98 N.Y.2d 208 (N.Y. 2002)]

Insurance is designed to protect against unknown, fortuitous risks, and
fortuity is a requirement of all policies of insurance. [Burlington Ins.
Co. v. Tex. Krishnas, Inc., 143 S.W.3d 226, 230 (Tex. App.-Eastland
2004, no pet.); Scottsdale Ins. Co. v. Travis, 68 S.W.3d 72, 75 (Tex.
App.-Dallas 2001, pet. denied); Two Pesos, Inc. v. Gulf Ins. Co., 901
S.W.2d 495, 502 (Tex.App.-Houston [14th Dist.] 1995, no writ) (op. on
reh'g).]

An insured cannot insure against something that has already begun and
which is known to have begun. [Summers v. Harris, 573 F.2d 869, 872 (5th
Cir.1978).]

The fortuity doctrine precludes coverage for two categories of losses:
known losses and losses in progress. A "known loss" is one that the
insured knew had occurred before the insured entered into the contract
for insurance. [Burch v. Commonwealth County Mut. Ins. Co., 450 S.W.2d
838, 840-41 (Tex.1970)] A "loss in progress" involves those situations
in which the insured knows, or should know, of a loss that is ongoing at
the time the policy is issued. [Warrantech Corp. v. Steadfast Ins. Co.,
210 S.W.3d 760 (Tex. App. 2006)]

In determining whether an event constitutes an accident courts must
analyze this issue according to the doctrine of fortuity:

whether the insured intended the event to occur; and
whether the event was a chance event beyond the control of the insured.

Policy language insuring against accidents applies only if the insured
did not intend the event or result to occur. [Blakeley v. Consol. Ins.
Co. (Ky. Ct. App. 2021)]


Go to the Insurance Claims Library –
http://zalma.com/blog/insurance-claims-library.

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