Burden Of Proof

Burden of proof is a legal standard that requires parties to demonstrate that a claim is valid or invalid based on facts and evidence. Burden of proof is typically required of one party in a claim, and in many cases the party that is filing a claim is the party that must demonstrate that the claim is valid.

The burden of proof requirement is designed to ensure that legal decisions are made based on facts rather than by conjecture. In insurance, it is used in the courts to determine whether a loss is covered by an insurance policy. Typically, the insured has the burden of proof to demonstrate that a loss is covered under the policy, while the insurer has the burden of proof to demonstrate that a loss was excluded under the terms of the policy contract.

In some cases several insurance companies will use the courts to determine which company is responsible for providing coverage. This situation occurs in circumstances in which the insured has several different policies covering similar or related risks. The insurers are required to demonstrate either that the loss was caused by an event that was not covered under the policy, or that another insurance company is responsible for the coverage. The courts may decide that a particular policy is responsible for providing coverage, but may also determine that the different insurers are responsible for a portion of the loss.

Providing information to prove that insurance coverage applies can be complicated. For example, a homeowner's house is destroyed during a hurricane. The homeowner’s policy may provide coverage for losses caused by wind, but not by water. The insured must prove that the destruction was caused by wind damage, while the insurer will try to prove that the damage was caused by water. The courts may find that both types of risk caused the damage.

In a fair number of insurance cases that get to court, negligence is alleged. This has been defined as the failure to exercise reasonable care. Insurers will try to prove that the insured failed to do something a reasonable person would do, or conversely, did something a reasonable person wouldn't do. As in all civil cases, the ruling is based on a preponderance of the evidence -- more than 50% of the evidence must point to something. It's the stuff that lawyers bill millions of hours for every year.