Part 1 discussed that insurance operates in an environment that contributes to it being a conservative service sector that is somewhat resistant to change. This part is about elements that arise from the other fact, which is that insurance often faces and responds to evolving circumstances.
Insurance companies provide a dizzying array of products that address private and commercial needs for coverage. Along with continuously maintaining traditional protection against age-old sources of loss such as fire, windstorm, weight of ice/snow, collision, theft, vandalism and many others, insurers must also monitor the development of new sources of loss such as the following:
Terrorism
Nanotechnology
Data Privacy
Cyber Security
Coverage for Digital Assets
Sharing/Gig Economy
Climate Change Risks
Internet of Things Product Liability
Driverless Vehicles/Deliveries
While insurers attempt to handle such challenges, adjustment is uneven and takes time. A typical arc involves recognition of a newer loss exposure being followed closely by creating exclusions to bar coverage. As such exposures mature, showing patterns of claims, forms or modified exclusions arise that provide limited protection. As time passes, additional experience accumulates and available coverage often becomes broader and, eventually, wider spread.
However, the process of dealing with emerging-to-maturing exposures can create instances of silent coverage. The latter occurs when a given policy neither expressly mentions a source of loss as covered nor does it appear among specific exclusions; therefore a policy is silent. Disputes arise as parties who suffer loss by such exposures will argue that silence equates to coverage. Silent situations once discovered are eventually resolved by including reference to them that results in either deliberate coverage or exclusion.
In any case, the insurance sector, while inherently conservative, constantly faces and addresses change from a variety of sources. Constant communication with an insurance professional is a prudent move for monitoring changes in available insurance protection.
