ABSTRACT
It is possible to insure against almost every kind of loss. The terms of an insurance policy are, however, carefully worded so as to specify precisely what risks are covered and the conditions under which liability will be accepted by the insurer. Where risks are foreseeable the policy clearly sets out the responsibilities of the insured to prevent such losses. Many people fail to read the “small print” and assume that their policy will pay out for all kinds of loss or damage. Only after making a claim do they discover they did not observe their part of the contract. For example, a homeowner returned to his house after taking a long winter vacation to find the central heating boiler had failed and, as a result of a particularly severe frost, several radiators had split open. In addition, a water supply pipe had burst during the frost and had flooded the ground floor of his house when the thaw came. Unfortunately, he found that it was a requirement of his household insurance policy that he should have had his heating system serviced annually. It transpired that it had not been serviced or inspected since it was installed more than 6 years before the incident.
