LLQP Ethics and Professional Practice (Common Law) Practice Exam

Intentional harm is commonly excluded from insurance claims because most insurance policies are designed to protect against unforeseen and unintended events rather than actions that are deliberately caused by the policyholder. This principle is rooted in the idea that insurance is meant to manage risk and provide a safety net for events that are not under the control of the insured individual.

By excluding claims related to intentional harm, insurers aim to prevent moral hazard, where individuals may act recklessly or maliciously if they believe they can shift the consequences of their actions onto the insurer. In other words, allowing claims for intentional harm would undermine the fundamental purpose of insurance, which is to provide coverage for unintentional losses instead.

Natural disasters and pre-existing conditions are often specifically addressed in insurance policies either through exclusions or specific clauses, but they are not as universally excluded as intentional harm. Accidental injuries, on the other hand, are typically covered by most insurance policies, reinforcing the focus on protecting policyholders from unforeseen events.