Any one of alternatives 2,3 or 4 could be chosen with the same result. It limits the number of deductibles to each separate container. The only reservation in respect of the fourth alternative (and possibly the second) is that the word "event" or "occurrence" in the English language usually denotes something that is circumscribed in time and space and, although it need not be instantaneous, it should have a defined beginning and an end. It is not usually equated with a process. However, it could be argued that the "occurrence" takes place when the faulty material first fails sufficiently to allow the air into the container. This could certainly be the favored interpretation if there was evidence to suggest that the seal in some instances did not fail or, alternatively, that the seals on individual containers cracked at different times.
Another example of the problems surrounding occurrence deductibles is where an assured purchases an additive to use in its production of cakes. The additive was produced elsewhere but, unfortunately, as a result of poor quality control, dirt and grease became incorporated in the additive. The additive was delivered to the assured in six separate batches. It was mixed with other ingredients on the assured's premises. Again, the deductible was defined by occurrence and, again, there are various alternatives as to what constituted the occurrence:
- the poor quality control which resulted in the impurities in the additive;
- the delivery of each separate batch of additive;
- on each occasion the additive was mixed into the other ingredients; or
- on each occasion a cake was manufactured.
Alternative number 3 is probably the most likely choice as the effective occurrence - or, to look at it from a causation viewpoint, the proximate cause.
Another example of the problems surrounding occurrence deductibles is where an assured purchases an additive to use in its production of cakes. The additive was produced elsewhere but, unfortunately, as a result of poor quality control, dirt and grease became incorporated in the additive. The additive was delivered to the assured in six separate batches. It was mixed with other ingredients on the assured's premises. Again, the deductible was defined by occurrence and, again, there are various alternatives as to what constituted the occurrence:
- the poor quality control which resulted in the impurities in the additive;
- the delivery of each separate batch of additive;
- on each occasion the additive was mixed into the other ingredients; or
- on each occasion a cake was manufactured.
Alternative number 3 is probably the most likely choice as the effective occurrence - or, to look at it from a causation viewpoint, the proximate cause.
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