Under the law of insurance, exemption causes protect the insurance company under the contract. Exemption causes are conditions specified in an insurance policy that exclude coverage for certain types of losses or events. In other words, if an event that is excluded under an exemption cause occurs, the insurance company is not obligated to pay out any claims for that event.
The purpose of exemption causes is to protect the insurance company from losses that are outside the scope of the policy. For example, if a homeowner's insurance policy has an exemption cause for flood damage, the insurance company is not responsible for covering any damage caused by flooding, even if it is a natural disaster.
Exemption causes can vary widely depending on the type of insurance policy and the specific risks that are being insured against. Some common exemption causes include intentional acts by the insured, damage caused by war or terrorism, and damage caused by natural disasters.
In summary, exemption causes protect the insurance company under the contract by limiting their liability for certain types of losses or events. This helps to ensure that insurance policies remain financially sustainable and that insurance companies can continue to provide coverage to their customers over the long term.