Insurance Risks - The Burden of Proof

Insurance Risks - The Burden of Proof

Insurance Risks - The Burden of Proof

The significant feature, however, which distinguishes ARPI from other categories of insurance is that it covers the assured against physical loss caused by all perils and risks. Of course, having covered the assured in the insuring clause, the policy will then continue to exclude cover for various risks in the exclusion clauses, such as nuclear explosion, war, flood and many more. Therefore, is the ARPI different from a standard fire policy? After the application of numerous exclusions, the assured may only be left with cover for fire

Certainly in the United States an all risks policy is considered as "different". There is a presumption that it extends cover beyond the norm: "a special insurance and extended to risks other than those usually contemplated" (Goix v. Knox [1800] NY 1 Johns Gas. 337).

The key factor distinguishing an ARPI is the reversal of the burden of proof.

In a fire policy, the assured must prove that the loss is caused by fire. Under ARPI the assured needs only to prove the loss has taken place, subject to it being fortuitous (although this begs the question as to what is meant by fortuitous or inevitable as discussed below), and the onus switches to the insurer to prove that the exclusions apply.

Therefore, it is essential that exclusion clauses are drafted in an ARPI with absolute clarity. As with all such rules there are exceptions, and it is common where a policy is to cover areas of potential conflict to include a reverse burden of proof clause in the war exclusion clause.

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