One purpose in sending such information may be to help improve the insurer's ability to rely on exclusions based on an intentional failure to act, and in order to establish that the insureds were aware of the issue, and therefore that any exposures did not result from a fortuitous event. Also, it may be insufficient that the insured was warned that damage may ensue from its actions, or that, once warned, an insured decided to take a calculated risk and proceed. The actual knowledge and intent of the insured will be important. It should also be noted that the case law interpreting the intentional act exclusion is inconsistent. Some courts have focused on the intention to perform the act, others on the intention to cause the damage.
Most policies exclude coverage for losses caused by latent defects.
This exclusion may exclude wear and tear and the cost of repairing faulty or improper material, workmanship or design. A Year 2000 problem may fall within any one of these categories, although opinion is divided. Other exclusions commonly utilized in policies may also be relevant to the Year 2000 issue. Examples include exclusions against liability arising from the policyholder's recalled products, work or impaired property or those that exclude claims that arise out of contract obligations. Individual insurance policies should be consulted for specific exclusions.