subject: Inherent Vice, Natural Deterioration And Associated Exclusions - What Is Inevitable - Part VII [print this page] It is interesting to consider the word "accidental" in respect of theft, which is frequently covered by ARPI policies. Clearly the act of theft is not an accident, it is a deliberate action of a third party. This re-emphasises the proposition that the concept of "accidental" must be looked at from the assured's viewpoint, namely it is accidental in the sense that the assured has suffered loss by some unexpected act which he did not foresee.
Two US cases dealing with all risk aircraft hull policies illustrate the requirement that these ARPI policies can only cover lawful acts. In the case of Lineas Aereas Colombianas Empresas v. Travelers Fire Insurance Company 257 F 2d 150 (1958), t he policy expressly stated that it should only apply where the plane was flown by pilots who held the requisite US CAB Certificates or comparable licences issued by Colombian air authorities and excluded liability for operations with the knowledge of the assured which violated Federal Civil Air Regulations. The assured altered the nationality of the plane from Colombian to Mexican thus committing it to an operation contrary to Colombian law. It further used the plane for carrying passengers, although use of the plane under Colombian law was expressly limited to cargo service and used Mexican pilots who did not hold the requisite Colombian licences. The court found that the plane was not covered by the policy in those circumstances.
In the case of Hedges Enterprises Inc. v. Fireman s Insurance Gk 225 NYS 2d 779 (1962), the aircraft was covered against all risks of physical loss or damage. The court held that the assured was not covered because at the time of the accident the aeroplane was operated without being properly registered by its owner pursuant to the requirements of the Federal and State statutes. The registration of the plane by the new owners had not been submitted until two days after the accident.
Although these cases deal with express provisions, it is suggested that the decisions should have been the same even without these express provisions in that the planes were flown unlawfully.
Inherent Vice, Natural Deterioration And Associated Exclusions - What Is Inevitable - Part VII
