The terms sudden and accidental appear a scant sixteen times in sixty-four pages of policy language across multiple policies, and all instances are centered around specific perils in certain situations. (Credit: Dragonstock/Adobe Stock)
If you have been in insurance for any length of time, you've heard the phrase "sudden and accidental", meaning that the cause of loss must be just that; sudden and accidental. It is routinely tossed around as if it has been standard wording forever and is a key factor in determining whether a loss is covered. Adjusters and agents often use the term sudden and accidental, in particular when setting parameters as to why a loss should or should not be covered.
The truth, however, is surprising, if not downright startling. Sudden and accidental are not widespread parameters for covered losses; in fact, the term appears rarely, if at all, in most policies. Let's look.
Homeowners
In the ISO homeowners form HO 00 03 03 22, the terms 'sudden and accidental' appear together only three times. Section I Perils Insured Against, which lists coverages for A and B, it states, "we insure against direct physical loss to property described in Coverages A and B."
The direct physical loss doesn't have to be sudden, it doesn't have to be accidental, and it certainly doesn't have to be both sudden and accidental. The loss has to be direct, but direct is not a defined term. If a claim goes to court, courts typically refer to a standard desk reference for terms that are undefined in the policy. A desk reference is what an average policyholder has access to and will be most likely to use. Merriam-Webster online defines direct as, proceeding from one point to another in time or space without deviation or interruption; stemming immediately from a source; having no compromising or impairing element. Nothing in any of those definitions has anything to do with suddenness or an accidental occurrence. The definitions indicate that direct is acting in an immediate or primary way, not as a consequence or result of something else. Therefore, under Perils Insured Against for coverages A and B, sudden and accidental is not required.
Even if the terms are taken separately, they don't appear even a dozen times in the homeowners policy. The first appearance of sudden in the HO 00 03 is on page thirteen, under coverage C, the peril of smoke. This is also the first instance where something must be both sudden and accidental; the damage must be sudden and accidental damage from smoke, including puffbacks from a boiler, furnace, or related equipment. Smoke from agricultural or industrial operations is not included.
The term sudden next appears on the same page under Sudden and Accidental Tearing Apart, Cracking, Burning or Bulging. Again, this instance is where sudden and accidental appear together, and again it is related to a specific named peril for coverage C. This is regarding failure to a hot water heating system, air conditioning or fire protection system, or appliance for heating water. Sudden is used in the description of the peril, as is the term accidental.
The next instance also applies to a named peril under coverage C; this is the peril for Sudden and Accidental Damage from an Artificially Generated Electrical Current. The peril is addressing sudden power surges. Artificially generated current is current delivered from the utility and not mother nature. There are no other references to sudden in the homeowners policy.
There are a few references for accidental beyond those discussed above. Again, they pertain to particular policy language, and are not a broad statement dictating that any loss to the covered property be sudden and accidental. The first instance of accidental appears on page eleven under perils insured against, section 2. (c) (5) discussing the exception to the exclusion for mold, fungus and wet rot when the loss was caused by the accidental discharge or overflow of water or steam from certain devices, or drains off premises. Accidental is next referenced in the exception to the exclusions listed in Exception To c. (6). Again, this is dealing with accidental discharge of water or steam, and ensuing damages.
Accidental is referenced in the earlier mentioned coverage C perils referring to sudden and accidental together. Another coverage C peril that references accidental is Accidental Discharge or Overflow of Water or Steam; this is coverage to personal property damaged by discharge of water or steam from various appliances. References to accidental appear a few times throughout the description of this coverage.
Under exclusions, accidental appears under the war exclusion where it is explained that the discharge of a nuclear weapon, even if deemed accidental, will still be considered a warlike act. The same wording appears under the liability section under the war exclusion as well. That is it; there are no other references to sudden and accidental causes of loss in the homeowners policy.
Personal auto
It doesn't stop there, however. The ISO personal auto policy PP 00 01 09 18 has no references to the term sudden at all. The first reference to accidental appears under the exclusions for medical payments on page five, and again is in reference to the discharge of a nuclear weapon.
The next reference appears under the physical damage coverages, where in the insuring agreement it states, "We will pay for direct and accidental loss…" demonstrating that the loss to the vehicle must be accidental, but it does not have to be sudden, although it often is. Again, under exclusions the accidental language appears regarding the discharge of a nuclear weapon. That is it; there are no other references in the personal auto policy for sudden or accidental, or even sudden and accidental together.
Commercial property
It's not just personal lines forms either; the CP 10 30 09 17 Causes of Loss form mentions sudden only once, in the definition of sinkhole; the sudden sinking or collapse of land into underground spaces. The first reference of accidental is under the Additional Coverage Extensions for Property In Transit, F. 1. B. (2) under vehicle collision, where collision is an accidental contact of your vehicle with another object. The next reference is the definition of Water Damage, which is an accidental discharge or leakage of water etc. from various equipment or appliances. It then states that to the extent accidental discharge or leakage of water falls within criteria under c.(1) or c.(2) of the definition of specified causes of loss, that the exclusion that precludes coverage for surface water or water under the ground does not apply.
Commercial general liability
The CGL policy CG 00 01 04 13 is similar; sudden and accidental are referred to only once, and they appear under the Damage to Impaired Property or Property Not Physically Injured exclusion as an exception to the exclusion for loss of use of other property arising out of sudden and accidental physical injury to the insured's product or work.
Conclusion
The terms sudden and accidental appear a scant sixteen times in sixty-four pages of policy language across multiple policies, and all instances are centered around specific perils in certain situations. There may be company-specific policies that rely on sudden and accidental language to describe covered perils, but the ISO forms and most others likely do not. It's time to retire looking at causes of loss to determine if they're sudden and accidental as a determination of coverage since standard policies rarely use the language.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.