Although the words sound impressive, the phrase Acts of God occurs in
practically all insurance policy forms. This insurance covers events arising
out of natural causes with no human intervention which could not have been
prevented by reasonable care or foresight. These are generally natural events
such as flood but are so out of the ordinary that no one could reasonably
expect them.
Acts of God could include:
Unusual weather factors - tropical storms, floods even
droughts
Unusual geological phenomenon - volcanoes, earthquakes, tidal
waves etc.
Unusual hazards - meteor damage, plagues of insects
etc.
If when you make a claim your insurer states that the calamity which
afflicted your business was an "Act of God" they do not have to pay. Needless
to say there have been a large number of court cases where claimants and
insurers have argued over what can reasonably be foreseen and what can not.
Often it depends on the particular circumstances. Obviously flood damage in a
desert area might be a rare occurrence, however floods in a river plain are
more common.
When taking out your insurance you must try and make an assessment
and reach an agreement with your insurer over what is reasonable to expect and
what is unforeseen.
