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Mysterious Disappearance, Loss or Shortage Disclosed on Inventory,  Intentional Acts & Inherent Vice  

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 An exclusion is a provision of an insurance policy referring to hazards,  perils, circumstances, or property not covered by the policy.  Exclusions are usually contained in the coverage form or causes of loss  form used to construct the insurance policy.\\u201d [IRMI Online Glossary of  Insurance & Risk Management Terms https://www.irmi.com/online/insurance-glossary/terms/e/exclusion.aspx  (last visited Mar. 8, 2017)].  Intentional Act  \\u201cOne common exclusion is a clause that prohibits coverage for an  intentional loss.\\u201d  Mysterious Disappearance  The term \\u201cmysterious disappearance\\u201d first appeared in insurance policies  in 1943. Johnson v. General Accident, Fire & Life Assur. Corp., 454  S.W. 2d 837, 838 (Texas California Civil Code. App. 1970). The term has  been defined several ways, but all share the sense of an unexplained  loss.  The term \\u201cmysterious disappearance\\u201d first appeared in insurance policies  in 1943. Johnson v. General Accident, Fire & Life Assur. Corp., 454  S.W. 2d 837, 838 (Texas California Civil Code. App. 1970). The term has  been defined several ways, but all share the sense of an unexplained  loss.  Shortage Disclosed on Inventory   The \\u201cmysterious disappearance\\u201d exclusion is often paired with, or  followed by, an exclusion for loss or shortage disclosed on taking an  inventory because of the similarity of moral hazard raised by losses  either unknown or not discovered until an inventory is taken. The  inventory shortage exclusion is often misunderstood and misapplied. The  exclusion, in simple, clear and unambiguous language states: \\u201cThis  policy does not insure against \\u2026 [l]oss or shortage disclosed upon  taking inventory.\\u201d  Inherent Vice   Inherent vice relates to internal decomposition or some quality which  brings about the object\\u2019s own injury or destruction, not an extraneous  cause. [Employers Casualty Company v. Holm, 393 S.W. 2d 363, 367 (Tex.  Civ. App. 1965).] The subjective test for fortuity raises questions  regarding whether the inherent vice exclusion is effective.  \\xa9 2021 \\u2013 Barry Zalma