Catastrophic Damages: Liability and Insurance

  • Pablo Salvador Coderch
  • Sonia Ramos González
  • Rosa Milá Rafel
Chapter

Abstract

A castastrophe is defined as an event, sudden and unexpected, that causes devastating harm to a large number of victims, triggering the need for significant and coordinated public response. In many cases, a political decision qualifies the event as catastrophic. From an insurance standpoint, a catastrophe is considered a cumulative risk with low frequency and high intensity, making these risks very costly to insure. Insurance companies may insure against such harms by requiring payment of supplemental premiums. Some risks are excluded from coverage. These include natural disasters, like earthquakes and floods, and man-made ones, like terrorism and nuclear accidents. The legal systems covered by this report handle insurance coverage of catastrophes in three different ways: private contract, default rule excluding catastrophic risk from private contract unless otherwise agreed, or imposition of a legal obligation on insurers to cover certain risks, particularly those that are historically recurrent. National compensation funds for victims also play a role in redressing catastrophic damage. Finally, the law of torts, although better equipped to address cases of individual injury, nonetheless has a role to play under principles of negligence or intentional torts, as well as strict liability for abnormally dangerous activities.

Keywords

Private Insurance Insurance Policy Insurance Contract Strict Liability Catastrophic Risk 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Copyright information

© Springer Science+Business Media B.V. 2012

Authors and Affiliations

  • Pablo Salvador Coderch
    • 1
  • Sonia Ramos González
    • 2
  • Rosa Milá Rafel
    • 1
  1. 1.Private Law DepartmentPompeu Fabra universityBarcelonaSpain
  2. 2.Private Law DepartmentUniversity of LleidaLleidaSpain

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