Title 3 TWO GENERAL DIVISIONS OF CASUALTY INSURANCE.
CASUALT Y INSURANCE (1) Insurance against specified perils which may affect the person and /or property
Sec. 176. Casualty insurance is insurance covering loss or liability arising from
accident or mishap, excluding certain types of loss which by law or custom are
considered as falling exclusively within the scope of other types of insurance such as
fire or marine.
It includes, but is not limited to,
 employer's liability insurance,
 workmen's compensation insurance,
 public liability insurance,
 motor vehicle liability insurance,
 plate glass insurance,
 burglary and theft insurance,
 personal accident and health insurance as written by non-life insurance
companies, and
 other substantially similar kinds of insurance.
CASUALTY INSURANCE
Casualty insurance includes all forms of insurance against loss or liability arising
from accident or mishap excluding certain types of loss or liability which are not
within the scope of other types of insurance, namely: marine; fire; suretyship; and
life.
RISKS OR LOSSES COVERED.
(1) Accepting "casualty" to mean "accident" — that is, a violent mishap proceeding
from an unknown or unexpected cause — casualty insurance might be presumed to
include any loss or damage when an accident is the cause of the loss.
Thus, a casualty insurance policy excludes losses arising from accident which are
within the coverage of the other types of insurance mentioned.
(2) In burglary, robbery and theft insurance, the opportunity to defraud the insurer
— the moral hazard — is so great that insurer have found it necessary to fill up their
policies with many restrictions designed to reduce the hazard.
The purpose of the exception is to guard against liability should the theft be
committed by one having unrestricted access to the property.
of the insured such as personal accident, robbery or theft, damage to or loss of
motor vehicle, insolvency of debtors, defalcation of employees, etc.; and
(2) Insurance against specified perils which may give rise to liability on the part of
the insured for claims for injuries to others or for damage to their property,
such as workmen's compensation, motor vehicle liability, professional liability,
products liability, etc.
LIABILITY INSURANCE.
Liability insurance has been said to be a contract of indemnity for the benefit of the
insured and those in privity with him, or those to whom the law upon the grounds
of public policy extends the indemnity against liability.
LIABILITY INSURABLE.
(1) Liability for quasi-delict or non-fulfillment of contract. — Liability, as we deal in
this work, is financial responsibility that one party has to another party as a
consequence of doing or failing to do something.
Liability involving the commission of a quasi-delict or tort is a civil injury, and not a
felony or crime which is a public injury. The first is remedied by civil action
instituted by the injured party, while the State takes action with respect to the
second to punish the offender.
(2) Liability for criminal negligence. — Liabilities arising out of acts of negligence
which are also criminal are also insurable on the ground that such acts are
accidental.
(3) Liability for deliberate criminal acts – Liability consequences of deliberate
criminal acts are not insurable.
INSURABLE INTEREST IN LIABILITY INSURANCE.
As a general rule, liability insurance, like other forms of insurance, must be
supported by an insurable interest in the insured, although there is some authority
to the contrary.
The interest does not depend upon whether the insured has a legal or equitable
interest in property, but upon whether he may be charged by law with the liability
against which insurance is taken out.
Therefore, liability insurance — assuming one qualifies as an insured — is always
supported by an insurable interest.
 Is the policy for indemnity against liability? Yes. From the fact that the
INSURANCE AGAINST LIABILITY v. INSURANCE AGAINST ACTUAL LOSS insured is liable to third persons, such third persons are entitled to sue the insurer.
insurance against liability Insurance against actual loss ACCIDENT AND HEALTH INSURANCE.
the coverage or liability of the insurer an action against the insurer does not Accident insurance health insurance
attaches when the liability of the lie until an actual loss is sustained by reimburses the insured for pecuniary reimburses the insured for pecuniary
insured to the injured third party the insured loss suffered as a result of injuries loss arising out of disease-related
attaches, regardless of actual loss at sustained in an accident illness.
that time. In both kinds of insurance, the insured is reimbursed for medical and hospital
expenses and in the case of accident insurance and sometimes health insurance,
RIGHT OF INJURED PERSON TO SUE INSURER OF PARTY AT FAULT. earnings as a result of the incapacity.
The right of the person injured to sue the insurer of the party at fault (insured) Accident and health coverages are often combined in the same policy thereby
depends on whether the contract of insurance is intended to benefit third persons protecting the insured from loss from either kind of disability.
also or only the insured. the insured's beneficiary has the
burden of proof in demonstrating that
The test applied is this: the cause of death is due to the
(1) Indemnity against third party liability. — Where the contract provides for covered peril.
indemnity against liability to third persons, then third persons to whom the insured
is liable, can sue directly the insurer upon the occurrence of the injury or event Once that fact is established, the
upon which the liability depends. The liability of the insurer in direct. burden then shifts to the insurer to
show any excepted peril that may have
The purpose is to protect the injured person against the insolvency of the insured been stipulated by the parties
who causes such injury and to give him a certain beneficial interest in the proceeds
of the policy. It is as if such injured person were especially named in the policy. MEANING OF "ACCIDENT" AND "ACCIDENTAL" AS USED IN ACCIDENT POLICY.
They are construed by the courts in their ordinary and common acceptation.
(2) Indemnity against actual loss or payment. — Where the contract is for
indemnity against actual loss or payment, then third persons cannot proceed An ACCIDENT is an event that takes place without one's foresight or expectation -
against the insurer, the contract being solely to reimburse the insured for liability an event that proceeds from an unknown cause, or is an unusual effect of a known
actually discharged by him through payment to third persons, said third person's cause and, therefore, not expected.
recourse being thus limited to the insured alone.
The concept "accident" is not necessarily synonymous with the concept of "no
BASIS AND EXTENT OF INSURER'S LIABILITY. fault." It may be utilized simply to distinguish intentional or malicious acts from
(1) Contract of insurance. — The liability of the insurer to the third party is based negligent or careless acts of man.
on contract; that of the insured is based on tort.
RULE AS TO DEATH OR INJURY RESULTING FROM "ACCIDENTAL" OR "ACCIDENTAL
(2) Sum limited in the contract.—While in a solidary obligation the creditor may MEANS.
enforce the entire obligation against one of the solidary debtors, in an insurance
contract, the insurer undertakes to indemnify the insured against loss, damage or The terms are considered as legally synonymous.
liability arising from unknown or contingent event.
Example of “accidental means”
EXAMPLE: The intentional pulling of a hair from the nose resulting in an abrasion through
The policy is one whereby the insurer agreed to indemnify the insured "against all which bacteria entered and caused infection, resulting in death. Here, both the
sums x x x which the insured shall become legally liable to pay in respect of a death cause and the result are accidental. In the former, the result (injury) is unintended
of or bodily injury to any person x x x." or unexpected.
Death or injury could be a result of accident, but the latter does not necessarily
result to the former.
GENERAL RULE. — The generally accepted rule is that death or injury does not
result from accident or accidental means within the terms of an accident policy if it
is the natural result of the insured's voluntary act, unaccompanied by anything
unforeseen except the death or injury.
EXCEPTION. — There is no accident when a deliberate act is performed unless some
additional, unexpected, independent and unforeseen happening occurs which
produces or brings about the result of injury or death.
negligent but it should not prevent his beneficiary from recovering from the
insurance policy.
MEANING OF "INTENTIONAL" AS USED IN ACCIDENT POLICY.
"INTENTIONAL," as used in an accident policy excepting intentional injuries inflicted
by the insured or any other person, etc., implies the exercise of the reasoning
faculties, consciousness, and volition.
If the injuries suffered by the insured clearly resulted from the intentional act of a
third person, the insurer is relieved from liability as stipulated.

In other words, where the death or injury is not the natural or probable result of
the insured's voluntary act, or if something unforeseen occurs in the doing of the
act which produces the injury, the resulting death is within the protection of
policies insuring against death or injury from accident.
Example:
in a case where the participation of the insured in a boxing contest was voluntary,
but the injury was sustained when he slid, giving occasion to the infliction by his
opponent of the blow that threw him to the ropes of the ring and without this
unfortunate incident, that is, the intentional slipping of the deceased, perhaps he
could not have died, the court held that his death may be regarded as accidental
although boxing is attended with some risk of external injuries.
SUICIDE AND WILLFUL EXPOSURE TO NEEDLESS PERIL
Both are in pari matere because they both signify a disregard for one's life. The only
difference is in degree, as suicide imports a positive act of ending such life whereas
the second act indicates a reckless risking of it that is almost suicidal in intent
EXAMPLE:
D (insured) lifted heavy objects all day as a result of which he suffered injury to his
back. For a claim to be payable under an accident policy, both the cause and the
result of the death or injury must be accidental. Here, the cause was the heavy work
— which was intentional. The injury, therefore, is not covered by the policy.
If D slips and falls while lifting the heavy objects, the cause (loss of balance) and the
result (injured back) are both accidental. His injury is covered by the policy.
EFFECT OF "NO ACTION" CLAUSE IN POLICY OF LIABILITY INSURANCE.
"No action" clause in the policy cannot prevail over the Rules of Court provisions
aimed at avoiding multiplicity of suits. Section 5 of Rule 2 on "joinder of causes of
action" 1 0 and Section 6 of Rule 3 on "permissive joinder of causes of parties""
cannot be superseded, at least with respect to third persons not a party to the
contract by a "no action" clause on the contract of insurance.

"Voluntary exposure to a known danger" is generally held to negate the accidental

character of whatever followed from the known danger.

Example:
 A person who walks a tightrope 1,000 meters above the ground and without
any safety device may not actually be intending to commit suicide, but his act
is nonetheless suicidal. He would thus be considered as "willfully exposing
himself to needless peril."
 an insured's death as a result of playing "Russian roulette" (pulling the trigger
of a revolver after spinning the cylinder with one cartridge in it) was held not
within the coverage of an accident insurance.
 But the mere act of the insured of pointing the gun to his temple, believing
that the gun was not loaded and the gun fired, when he pulled the trigger
resulting in his death, was held an accident. The insured was unquestionably