"The Known Loss Doctrine and Liability Insurance"
In an article published on Feb. 20, 2018, in Claims Journal, attorneys David Atkinson and Eleanor Jolley provide insight to the known loss doctrine, an insurance rule that provides that there is no coverage for a loss that has already occurred. Insurers can avoid these problems by either excluding coverage for known losses in the insuring agreement or requesting information regarding known losses during the application process. However, it is not always practical to request this information across all lines of business. Atkinson and Jolley explain that some courts have concluded that the known loss doctrine will bar coverage only when the legal liability of the insured is a certainty, while other courts have held that the rule applies if the insured knows that it is “substantially probable” that the insured will be liable for the damage. They explain how courts should continue to recognize the known loss rule and refuse to allow insurance coverage for a loss that has already occurred.
For the full article, you may click here.