DAMN-FOOL DOCTRINE

damn-fool doctrine.Insurance. The principle that an insurer may deny (esp. liability) coverage when  an  insured  engages  in  behavior  that  is  so  ill-conceived  that  the  insurer  should  not  be compelled  to  bear  the  loss  resulting  from  the  insured’s  actions.  —  Also  termed  damned-fool “The ‘damn foolish acts’ concept is not a perfect predictor of judicial decisions, both because of  its  own  imprecision  and  because  other  considerations,  such  as  a  desire  to  assure an  innocent third  party a source  of indemnification,  may influence a court. However, especially  when …  theinsured  who  acted  foolishly  has  sufficient  resources  to  provide  compensation  to  the  injured persons, analysis of a coverage issue  on  the basis  of a ‘damn  fool’ doctrine is frequently a very effective approach both to predicting and to understanding outcomes.” Robert E. Keeton & Alan I. Widiss,  Insurance  Law:  A  Guide  to  Fundamental  Principles,  Legal  Doctrines,  and  Commercial Practices § 5.4, at 541 (1988). [Blacks Law 8th]