Faulty (or defective) design

In the context of the exclusion in the contractors’ all risks insurance, this means: (a) a design which fails to meet the standards expected of design engineers; and (b) a design that proves inadequate but without blame or negligence attaching to the design engineer (Queensland Government Railways v. Manufacturers’ Mutual Insurance Co. Ltd (1969)). The design simply has to be faulty for the exclusion to apply.

Favorable selection

System in a managed care plan of choosing insurance subscribers or covered lives based on statistical data that show use of medical services in a particular population group to be lower than estimated or anticipated. See also cherry picking .

Fear of loss/fear of peril

Insurers are not liable for a loss caused by action prompted by the fear of loss by an insured peril. The insured peril is the remote cause not the proximate cause of the loss. The principle does not absolve insurers from their liability for sue and labour charges, salvage charges or general average contribution when properly incurred to prevent loss from a actual or imminent peril.