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(1) In common usage: an unforeseen and unplanned event or circumstances; or an unfortunate event resulting especially from carelessness or ignorance (Webster's Dictionary).

In insurance parlance, a term that is included within the insuring agreement of many types of liability insurance. In a few cases, the word "accident" is a defined term within the policy. In most cases, however, common law becomes the determinant of what is, or is not, an accident for purposes of triggering coverage.

(2) In boiler and machinery (BM) insurance, "accident" is defined within the policy to mean a sudden and accidental equipment breakdown that causes damage to the equipment that necessitates repair or replacement. BM coverage applies to loss or damage resulting from an accident to a covered object.

(3) In liability insurance, particularly older forms, the insuring agreements typically covered injuries or damages caused by an accident that was not the result of a deliberated intended act (even if the intended act caused an unexpected result). The term accident was undefined in such policies. The coverage trigger in the insuring agreement of modern liability policies, such as the commercial general liability (CGL) policy, applies to an "occurrence," which is defined to mean an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

Unlike most other modern liability policies, the commercial auto liability insuring agreement continues to apply to injuries or damages caused by an "accident." In this case, the policy includes a definition, of sorts, of the term "accident"—that is, "[a]ccident" includes continuous or repeated exposure to the same conditions resulting in "bodily injury" or "property damage."

The personal auto policy's (PAP's) liability insuring agreement states that the insurer will pay damages for bodily injury or property damage for which any insured becomes legally responsible because of an auto accident. In this type of policy, the term accident is used in its ordinary sense, without including it as a defined term.

Links for IRMI Online Subscribers Only: CAI VIII.G; CLI V.L; CPI XI.D


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