We are not talking about the theological aspects of an Act of God. The term actually has a legal meaning throughout the English-speaking world.
An Act of God is a natural hazard outside human control, such as an earthquake or tsunami, for which no person can be held responsible. An act of God may amount to an exception to liability in contracts or it may be an “insured peril” in an insurance policy. An Act of God is also considered an event which could not have been foreseen, or if foreseeable, could not reasonably have been prevented or guarded against.
Keep the phrase “outside human control” in mind. “Act of God” hazards, such as earthquakes, tornadoes, tsunamis, and lightning strikes are quite often written into insurance policies, business contracts, and foundational American environmental legislation like the Clean Water Act, and the Comprehensive Environmental Response, Compensation, and Liability Act, according to Slate.
Herein lies the problem with using the phrase, “Act of God.” With our rapid scientific improvement in the understanding of extreme weather events, and their increase due to climate change, our ability – through the use of better technology and satellite imaging – to foresee the frequency and damage of these extreme events is increasing.
So, it stands to reason that extreme weather events are not actually “Acts of God” because “their probability is further known, and their likelihood increases,” reports Business Green.
Human activity vs Acts of God
Recently, human activities have been claimed to be the root causes of some events until now considered natural disasters. In particular:
Geothermal injections of water provoking earthquakes (Basel, Switzerland, 2003). Markus Häring, 57, a geologist and managing director of Geothermal Explorers Ltd in Switzerland was the only defendant in a lawsuit that involved several earthquakes in court, which shook the city of Basel and its surroundings. The strongest being a magnitude of 3.4. More quakes followed.
Haring was acquitted of the charges brought against him and his firm because it was determined the quakes were triggered by drilling for the Deep Heat Mining geothermal project in the district of Kleinhüningen in Basel.
Such events as described, are possibly threatening the legal status of acts of God and may establish liabilities where none existed until now. In other words, acts of God must be unpredictable, and their damage must be unpreventable. In this case, the earthquakes were preventable.
We have also seen earthquakes caused by fracking, or the injection of water and chemicals into the Earth in the United States, Canada, and other countries. In November 2016, geoscientists with the University of Calgary conducted a study of earthquakes west of Fox Creek, Alberta. The study discovered a link between fracturing, or fracking, and earthquakes in the region.
What about climate change?
Between the devastating wildfires in California and the destructive forces of Hurricanes Florence and Michael on the East Coast earlier this fall, the property/casualty (P/C) insurance market has been tested. Some insurance firms were up to the challenge, covering homeowners and businesses destroyed by these events.
Some firms have struggled to fulfill their obligations to home and business owners impacted by the storms or wildfires. State Farm, Farmers, and AAA have the largest risk exposure in the California home market and are thus most likely to face direct impacts from wildfires.
Five of California’s most destructive wildfires on record occurred in 2017. In fact, 2017 is the costliest year on record for insurers with total U.S. wildfire peril totaling $16 billion in losses. We can add wildfires in Europe and other regions of the world, as well as hurricanes, extreme flooding, mudslides and other events.
“The insurance industry will be unable to operate effectively if the current trajectory of climate change proves accurate,” says Insurance Australia Group (IAG) Executive Jacki Johnson, reports the Financial Review.
We can’t blame God for everything
Following the Paris Agreement, the public now knows who triggers the growing number of hurricanes, floods, and extinctions, and it is not God. Actually, scientists have been warning us for decades about climate change.
Slate describes the obsolescence of “acts of God” to the symptom of a deeper disease in humans – “Our legal and intellectual frameworks have not kept pace with our understanding of the climate.”
Basically, no one, not the boards of companies or homeowners, insurance companies, investors – nobody – can claim they do not know the reality of climate change. Businesses and corporations are responsible for including these considerations in the company’s risk assessment, to ensure the company discloses relevant knowledge on risks posed by climate change and then takes the necessary adaptive actions.
Another issue is environmental law in the U.S. In our environmental laws, the act of God protects companies from liability when their activities “unavoidably” pollute or degrade the land. Companies that spill oil off American coasts, for instance, can avoid the cost of cleanup by successfully proving the spill resulted from an act of God.
This clause does not mean using an act of God has been successful, but it does point to the need to get rid of the phrase. It’s already almost impossible for companies to shed their liability using an act of God defense. So why don’t we change our use of the language?
