What does inherent vice refer to in insurance terms?

In insurance terminology, inherent vice refers to the fundamental qualities or characteristics of an item that make it susceptible to damage or degradation. This means that certain items may have built-in flaws or vulnerabilities that can lead to their destruction, particularly under specific conditions. For example, items made of materials that are prone to deterioration, such as certain woods, may suffer from inherent vice due to their nature; these materials can warp or rot over time, regardless of how well they are maintained.

Recognizing that inherent vice is a natural property of the item itself is crucial in understanding liability in insurance claims. Insurers often exclude coverage for damages resulting from inherent vice because these issues are not due to external factors or accidents, but rather stem from the item's intrinsic characteristics. Therefore, it plays a significant role in assessing risk and determining policy coverage.