Can AI or Chat GBT write poetry, perhaps by accident. But an insurance underwriter came up with the phrase: “Taking the suddenness out of accident.” Now that’s poetry. The poet was describing the “occurrence” definition in an insurance policy.
Here’s the story. There is an “insuring agreement” in all U.S. comprehensive general liability (CGL) policies that describes what the policy “covers,” i.e. insures. It is sometimes called the “trigger” of coverage. In the standard 1955 policy, the trigger of coverage was “accident.” Who doesn’t know what an accident is. You trip and fall. Your car runs into another car. You accidentally break a window. You have had an accident!
That definition served for a brief period, but America was changing. People began to be injured by products. Let’s not waste time with asbestos or the current horrible drugs misused in today’s world. Just the average drug that might unwittingly, from the perspective of the manufacturer, or perhaps with full knowledge, God forbid, caused an injury. Was that an accident? Of course not!
In Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076, 1087 (5th Cir. 1973), the Court held:
Under Texas law, a manufacturer of a defective product may be liable to a user or consumer in either warranty or tort.18 With respect to personal injuries caused by a defective product, the Texas Supreme Court has adopted the theory of strict liability in tort as expressed in section 402A of the Restatement (Second) of Torts (1964) ….
Section 402A provides, in relevant part:
‘One who sells any product in a defective condition unreasonably dangerous to the user or consumer . . . is subject to liability for physical harm thereby caused to the ultimate consumer or user’.
The decision in Borel
“had enormous implications for asbestos manufacturers and their insurance companies, as well as thousands of asbestos workers, their families, and their lawyers. According to Paul Brodeur, author of Outrageous Misconduct: The Asbestos Industry on Trial (1985), the Borel decision “triggered the greatest avalanche of toxic-tort litigation in the history of American jurisprudence. Some twenty-five thousand lawsuits were brought over the next decade as word spread that asbestos manufacturers could be held strictly liable under the law.” Borel v. Fibreboard Paper Prods. Corp., by: Robert Q. Keith and Robert J. Robertson in the Texas Historical Association (February 10, 2014).
This avalanche of litigation meant the insurance industry had to come up with a different definition. They set their underwriters down to the task. An underwriter has many meanings. In finance, it seems to mean people who draft an instrument for a financial institution. In insurance, it means the person who drafts the insurance contract.
An attorney named Richard Schmaltz, and this is from memory, but you can look it up in Google, was among the people on a committee that was asked to come up with something that would handle the insurance issue arising from products liability lawsuits. The term “accident” was not going to do it. It didn’t describe what happens when a drug caused injury, and the insurance industry thought it was not a good idea and perhaps potentially very harmful to allow courts to construe the word accident in a way that would allow it to cover products liability cases. So, they assigned a few underwriters, including Mr. Schmaltz, a lawyer who worked for First Liberty Mutual and then The Hartford, to draft a new definition. The new definition was as follows:
“occurrence” means “an accident, or repeated exposure to conditions, resulting in bodily injury or property damage neither expected nor intended from the standpoint of the insured.”
The phrase is not exactly poetic, but it certainly is not elegant, and it does the trick. And that definition in some way or other still exists to this day in most CGL policies.
Richard Schmaltz described the occurrence definition in his unpublished legal memorandum, which he titled, “Taking the Suddenness Out of Accident.”
Now this is interesting. Chat Bing, now called C0-Piolet, could not find those words or that phrase and said that it did not exist as far as it knew. It asked if another question might be more appropriate. Obviously, that phrase, or the data needed to find it, was not loaded into its database.
Making the same search through Google, which does not purport to be a very sophisticated AI device but is certainly one that all of us rely on, produced a different result. Google immediately found that phrase in a legal document which referred to the unpublished paper and the phrase, “taking the suddenness out of accident.”
Guess what, the insurance industry put the suddenness right back in the CGL policy with the pollution exclusion added years later, but that’s a subject for another article…