Working for an insurance company myself, I found this story interesting:
The gist of the story is that AIG, which provides aviation liability insurance for U.S. Airways, is refusing to pay off the losses to passengers of the Flight 1549 which went down in the Hudson. Now AIG has taken a lot of heat for the actions of the company, and a lot of it is deservedly so. However, this is not an action that they should take heat for.
Insurance exists to cover specific things. It does not exist as a pool of money to be collected from any time something bad may happen. Specific events must occur to trigger coverage. In the case of liability insurance, it exists to cover the insured for costs incurred in the defense and settlement of claims of negligence. In this case, not only should AIG defend U.S. Airways, it has an obligation to do so. From all appearances, the actions of U.S. Airways was not only not negligent, it actually exceeded what could reasonably be expected. Those passengers are lucky to still be alive. (more…)