I have been thinking about the "fortuitous" requirement and its mother, the "known loss doctrine." These are related concepts of claim denial. In other words, they are reasons for denying insurance coverage based on the claimant's actual knowledge that the loss already existed before applying for coverage for it. Even accepting the majority view that "known loss" depends on proof that the person claiming coverage actually knew of the loss, which would make the risk which caused the loss uninsurable because it was not "fortuitous," there are other areas of insurance besides claims that may benefit from an expansion of the concepts.
For one example, "retro premium" policies depend in part on a loss history as a basis for premiums. To the extent that the policyholder claims a lower premium based on a positive loss history, the policyholder's knowledge of losses before they happened seems relevant. Suppose as an illustration that the given policyholder's loss history is skewed in a positive direction because it paid and perhaps continues to pay below-market wages. Perhaps it is a manufacturer which has outsourced its manufacturing operations to a labor market like the one in Vietnam which famously pays wages way below the minimum wages prevailing anywhere in the United States. To the extent that the policyholder's "retro premiums" in this illustration are calculated on the basis of below-market wages, then the policyholder's knowledge will have no problem meeting the prevailing majority view of the "known loss doctrine;" after all, our hypothetical manufacturer moved its operations to Vietnam in order to make more profit by paying less wages to its workers. Nothing could be more intentional than that, most people would say.
As for who would prove what were the prevailing market wages during the time when the retro premium is calculated, insurance companies are in a perfect position to meet this burden. Insurance companies are already skilled at dealing with accountants and economists. Let's start with proof of wages below the minimum prevailing in the jurisdiction in which the retro premium is contested. If for some reason that jurisdiction has no minimum wage, then the insurance company should be permitted to put on proof of the wages prevailing in comparable markets that do have minimum-wage protections.
This is a good time to speculate on such things as we are invited to contemplate the continuing meanings of Labor Day.
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