Legal Memorandum: Applicability of Fortuity Doctrine in IN

Issue: When and how is the fortuity doctrine applicable in Indiana insurance law?

In general, the fortuity doctrine deals with loss or injuries that occur due to a particular peril that is insured against (such as death, fire, accident, or property damage), which results from the occurrence of a specific casualty or fortuitous event–an event which, so far as the parties to the contract are concerned, is dependent on chance.  American Deposit Corp. v. Schacht, 84 F.3d 834, 863 (7th Cir. 1996).   There is very little discussion about the fortuity doctrine in Indiana courts, but what discussion there is does not limit the doctrine to any specific type of insurance contract.  See, e.g., Iemma v. Adventure RV Rentals, Inc., 632 N.E.2d 1178 (Ind. Ct. App. 1994) (analyzing the doctrine in terms of a fire insurance policy); Stevenson v. Hamilton Mut. Ins. Co., 672 N.E.2d 467 (Ind. Ct. App. 1996) (analyzing the doctrine in terms of a medical malpractice insurance policy).

Neither the Indiana statutes nor the courts have ever defined a fortuitous event.  Instead, the courts have relied heavily on the definitions and explanations contained in an insurance law treatise, most recently stating, “[t]he principle that insurance should only be employed to transfer risks associated with fortuitous occurrences means that generally no coverage will exist for a loss that is caused intentionally.”  Stevenson, 672 N.E.2d at 471 (quoting R.E. Keeton & A.I. Widiss, Insurance Law § 5.4(d)(1) (1988)). 

The courts seem to prefer that, if the insurer wants to except from coverage damage that is caused by […]