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Contours of the Fortuity Doctrine
All states recognize by statute or common law that first-party property insurance only indemnifies fortuitous losses. See, e.g., N.Y. Ins. L. '1101(a)(1) (defining an 'insurance contract' as 'dependent on the happening of a fortuitous event'); Adams-Arapahoe Joint Sch. Dist. no. 28-J v. Continental Ins. Co., 891 F.2d 772, 774 (10th Cir. 1989). The requirement is at the heart of any insured 'risk' under the insuring agreements in property policies. See Concise Oxford English Dictionary, 11th Ed. (2006) (risk is 'the possibility that something unpleasant will happen'). The courts have not been called upon to interpret the doctrine frequently, but it has evolved with policy wordings to focus increasingly on the knowledge and conduct of the insured.
The origins of all-risk property contracts are in marine insurance, where cargo and hull properties were exposed to multiple risks in transit. In that context and others, the fortuity doctrine addressed both protection against moral hazard and preclusion of indemnity for loss that has happened or is certain to happen. For example, losses caused by defects inherent in the insured property were considered uninsured because they were not fortuitous. See Insurance Co. of N. Am. v. United States Gypsum Co., 678 F. Supp. 138, 142 (W.D. Va. 1988). Where an item of property was already doomed to destruction because of its own inherent qualities, there was no risk to insure. Rather, the loss was certain to occur and not insurable. See Id. at 141.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
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