Business, Legal & Accounting Glossary
A reason for an insurance company not to pay your claim. An unpreventable and unpredictable event which could cause loss or damage to buildings, land, vehicles etc.
An extraordinary and unexpected natural event, such as a hurricane, tornado, earthquake or even the sudden death of a person. An act of God may be a defence against liability for injuries or damages. Under the law of contracts, an act of God often serves as a valid excuse if one of the parties to the contract is unable to fulfil his or her duties — for instance, completing a construction project on time.
n. A natural catastrophe which no one can prevent such as an earthquake, a tidal wave, a volcanic eruption, a hurricane or a tornado. Acts of God are significant for two reasons 1) for the havoc and damage they wreak, and 2) because often contracts state that “acts of God” are an excuse for delay or failure to fulfil a commitment or to complete a construction project. Many insurance policies exempt coverage for damage caused by acts of God, which is one time an insurance company gets religion. At times disputes arise as to whether a violent storm or other disaster was an act of God (and therefore exempt from a claim) or a foreseeable natural event. God knows the answer!
An Act of God is the legal way of describing a natural event that couldn’t reasonably be foreseen or prevented – earthquakes in areas with no history of same, exceptionally high tides, lightning, extreme storms, etc.
Many insurance policies exclude Acts of God as reasons for a valid claim, although this can be challenged in court.
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This glossary post was last updated: 26th April, 2020 | 2 Views.