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Loch Ness Monster Insurance Costs Cruise Line $1.5M

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By Aditi Mukherji, JD on April 30, 2013 1:18 PM

There's car insurance, home insurance, and now, Loch Ness monster insurance.

A cruise company that tours the world-famous loch purchased £1 million in Loch Ness monster insurance, The Scottish Sun reports. That's about US$1.55 million.

But in the apocalyptic unlikely event that "Nessie" (aka the Loch Ness monster) strikes, would you even need insurance? Or could such a beastly encounter fall under basic contract provisions as an "act of God"?

Jacobite Cruises, which carries more than 100,000 sightseers on the world-famous loch every year, struck the deal with local insurance company Towergate Moray Firth last week -- the 80th anniversary of the first Nessie spotting, The Sun reports.

It was basically a publicity stunt. Though if you still want to be creeped out by what lurks beneath, listen to the Bloop. (OK, so it was probably an icequake.)

Even in the 0.0000000000001% chance that the Loch Ness monster is real and actually strikes a Jacobite cruise ship, would an insurance policy be necessary?

In general, the force majeure defense protects entities from liability for events that can't be anticipated or controlled.

Under the force majeure umbrella is the act of God defense, which is fitting for a deep sea creature catastrophe. An "act of God" happens when a natural event -- like a flood, earthquake, or (arguably) a monster -- wreaks havoc, and the event couldn't be predicted or prevented.

In the cruise company's case, it could be able to use the act of God defense against liability for passenger injuries if they were directly and exclusively caused by an act of God. But if the ship had some defect that added to the injuries, then the "act of God" defense wouldn't work.

If the Loch Ness monster indeed struck a ship, one argument is that it would be such an unpredictable natural event that the act of God defense would probably be just as effective as a large insurance policy. Even Jacobite Cruises owner Freda Newton admitted that the odds of a Loch Ness disaster are ridiculously low, reports The Sun.

But who knows, maybe the concept of monster insurance will catch on. Can you imagine monster insurance being advertised on TV commercials? Now that's a nightmare.

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