Insurance of losses arising from criminal acts

Abstract

The main reason why insurance policies are taken out is to provide protection to policyholders in the case of any event coming into being which would cause loss or damage to one's property or person. Such loss or damage could arise also through the commission of criminal acts. Therefore, one can say that insurance provides that peace of mind required with regards to the protection of one's property. One of the general principles of insurance is that an act committed out of the negligence of the insured is insurable. On the other hand, where the insured commits a wilful act on one's own property any claim which arises will not be insurable. Two points of view will be taken in this thesis. Firstly, the insured as the victim of loss caused to him and, secondly, the insured as the wrongdoer. The commission of criminal acts brings into play the principle of public policy, which does not allow one to benefit from one's own wrongdoing, which may render the policy void. On the other hand, there is the issue of the extent a victim will be allowed to insure losses caused to him due to third party criminal acts. Different criminal acts will be analysed such as homicide, bodily harm, fraud, and terrorism. These crimes will be examined vis-a-vis the relevant insurance policies and the respective policy wordings. Policy wordings must further be compared with various laws covering the wilful acts committed. It is relevant to point out the fact that most Malteseinsurance contracts, although regulated by Maltese law, have been imported wholly from British policies, and as a consequence certain inconsistencies may arise. As a corollary of the commission of criminal acts one must also refer to the issue of recovery rights from the claims settlement perspective. The Author will also be going into the issue of fraudulent claims and subrogation. Since the thesis discusses criminal acts, the aspect of the level of proof required will be entered into, keeping in mind that the level of proof required in civil cases is less onerous that that required in criminal cases. In conclusion, the thesis will focus on the aspect of insurance losses, namely material loss, bodily injury and death and any other liabilities arising out of criminal acts, whether committed by third parties to the detriment of the insured or by the insured himself.