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What is an ‘Act of God’? (in legal and insurance terms)

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All you need to know about 'Act of God' in insurance

Is a pandemic an Act of God? Does it deserve a place alongside hurricanes, floods, earthquakes and volcanoes and other natural phenomena? And, in the event that a natural disaster like coronavirus contributes to loss or injury, can negligence still be proved? 

An Act of God is often invoked when people or organisations want to escape accountability for things they believe to be entirely out of their control. But how does the law define an Act of God? And why is it important to understand the Act of God terminology in contracts and insurance?  

What is an Act of God?

The concept of an Act of God first appeared in Roman Law and seems to have entered English court verdicts in the 16th century. At that time, it was used as an excuse for someone not being able to appear in court because of an unavoidable event.

Subsequently, English law has defined an Act of God in the following ways:

  • It must be an event that’s exclusively the consequence of natural causes
  • It must be extraordinary in nature
  • It must be impossible for someone to anticipate or provide against

The definition given in Nugent v Smith (1876) says an act of God is caused by “elementary forces of nature unconnected with the agency of man or other cause”. 

In practice, an act of God has come to mean any event that’s beyond human activity or control where fault or blame for the consequences cannot be assigned to an individual or organisation

Understanding the terminology

However, an act of God doesn’t necessarily imply that no one is liable for damages. In the case of the flooding caused by ‘act of God’ Hurricane Katrina in the US, a judge ruled that the US Army Corps had been negligent in not maintaining adequate flood defences.

In the case of Covid-19, it could be argued that the spread of the disease involved human agency and that governments could be held liable for the success or otherwise of their public health measures. 

In the event of a hurricane flattening a dilapidated building, an insurance claim can be denied because the owner didn’t maintain the structure’s integrity.

In the UK, insurance policies no longer use Act of God clauses. Instead, they prefer to add a list of specific exclusions that make it clear to a customer what is and isn’t covered. As extreme weather events become more common, Acts of God clauses have cost US insurers billions of dollars. In the UK, property and possessions are protected by specific policies, for example, the Flood Re scheme set up by the government and employers to help homeowners in high flood risk areas. 

When is an Act of God probably not an Act of God?

In insurance terms, the lines can seem blurred. For example, if a house burns down due to a discarded cigarette, then any household insurance policy is unlikely to pay up. However, being hit by a lightning bolt and any claim should be successful depending on the exclusions in the policy.

When it comes to vehicle insurance, the position is very similar. If your car is crushed by a tree blown over in a storm, you’d be entitled to claim on your insurance for an Act of God. But if the tree was rotten and the homeowner should have had it cut down, the insurance company can claim that negligence was a contributing factor and withhold a payout.

In cases where insurance does cover for natural disasters, the insurer might look for other potential causes of the damage when determining who should pay. For example, wild animal damage may be covered by an insurance policy, but claims may have to be made against their owners’ insurance if a domestic pet is suspected.

Force Majeure

In contract law, an act of God is known as force majeure and is used to remove liability for natural catastrophes. Unlike an Act of God, force majeure can also refer to man-made events like warfare. It’s a French term that literally means ‘irresistible force’ and is defined by Black’s Law Dictionary, as any event that can’t be either anticipated or controlled by people or organisations.

In French law, three tests are applied to whether a force majeure defense is applicable: whether an event is external, unforeseeable and irresistible. For example, a French factory destroyed by an avalanche might not be able to apply a force majeure clause if an avalanche had previously occurred in the same area.

Issues arise when force majeure clauses are used to try and escape difficult, costly or uncommercial long-term contractual obligations. For example, in Thames Valley Power Ltd v Total Gas & Power Ltd Total attempted to rely on a force majeure clause when the price of gas meant that they could only fulfill the contract at a loss. 

However, the court ruled that simply because the contract had become uncommercial, Total could not invoke a force majeure clause.

When referring to a pandemic like the Covid-19 crisis, many contracts define such outbreaks separately from general Force Majeure clauses. Any business would have to prove a direct causal link between the virus and its inability to fulfil its contractual obligations. 

Acts of God and personal injury claims

If you’re knocked off your bike by slates blown off in a gale or tree branches brought down in a storm, can you make a claim, or will an Act of God defence be invoked? If the tree was rotten, or the roof was poorly maintained, then there could be a case for a successful personal injury claim if negligence is proved.

In cases like this it’s important you have a good solicitor and someone who can argue the specific points from above and get you what you are owed.

For example, Osbornes Law in London have come up against cases such as these numerous times.  Have a look through their case studies, and you’ll find a range of cases to view.

To make a successful claim against an Act of God defence, you must prove liability – for example, that a driver who loses control of their car has a history of blackouts and shouldn’t have been driving. 

However, most UK insurance policies no longer use the Act of God terminology, preferring to state exclusions found in any policy’s terms and conditions. 

ALWAYS ensure you read your Terms & Conditions thoroughly before entering into any kind of agreement.

Author details :

Technology & finance blogger and experienced Head of Digital –  Dave has worked in digital for 10 years, in client-side, agency-side, and freelance capacities. He now writes engaging content and creates innovative digital strategies for tech and finance organisations of all sizes.He is the creator of Enviroute – A new travel app that is currently seeking investment. Dave spends more time than he cares to admit watching skateboarding videos and likes to express himself through the medium of internet memes!