Consumers procure insurance for many reasons. One of the reasons
is to protect themselves from their own actions.
Negligence v recklessness
Some actions enjoy cover under insurance policies whilst others
don't. For example, negligent actions are usually covered
whilst reckless actions are usually not. Negligence can
colloquially be defined as failing to act reasonably which is
determined by an objective test, enquiring whether an insured acted
below the standard expected from a reasonable person under the same
circumstances. Recklessness, on the other hand, is loosely defined
as having knowledge of the danger associated with one's actions
but not caring about the result thereof. Contrary to the objective
test associated with negligence, the test for recklessness is
subjective, enquiring as to the state of mind of the insured at the
time of their actions.
