Mr. Green Tea is looking into a property insurance policy fo…
Mr. Green Tea is looking into a property insurance policy for its new production facility in Keyport, NJ. The town of Keyport is a coastal town, so in the event of severe weather (such as a hurricane) it does face the peril of severe coastal flooding. To add to this , Mr. Green Tea’s production facility is located only one block away from the ocean harbor, making it especially susceptible to coastal flooding during a storm. As Rich and Michael are reviewing the quotes for property insurance on the Keyport production facility, they are surprised to find that damage caused by flooding is not a covered loss event, and is excluded under most insurance policies. This is primarily because it violates which requirement of an insurable risk: