Legal Question in Administrative Law in California

Unless there is something patter of practice between the parties, a requirement by law, or a standard in the industry, an insurance term would not be read into a contract where silent.

I think Mr. Selik means "pattern" rather than "patter," and I generally agree with him.

Some terms and conditions can enter a contract even when the contract itself makes no specific mention of them. One way is when there is a pattern or past history of dealings between the parties, where certain things have become standard practice, and courts will say that those matters have become assumed or implied conditions of the contract....for example, if deliveries have always been made by insured U.S. Mail, and suddenly the seller/shipper resorts to no insurance or using FedEx Ground, arguably these could be breaches of contract. Also, if the past practice has been payment within 7 days of delivery, taking 45 days to pay could arguably be a breach of an implied term.

One of the better-known and often discussed implied terms is the so-called "implied covenant of good faith and fair dealing" which is implied in all contracts, according to famous jurist Benjamin Cardozo. This implied contract term means that each party to a contract impliedly agrees to carry out its duties faithfully and to avoid deliberately doing anything that will frustrate the other party in achieving his/her/its valid objectives under the agreement.

In the case of insurance, one should also consider the subject of the contract and the type and relationship of the parties, because certain types of insurance are, technically, required by lawin certain kinds of contracts. Examples include requirements for liability and workers' comp. coverage in certain home-improvement contracts.

A full discussion of contracts where insurance is either an implied or a statutory requirement and the remedies for failure to provide it could get very technical very quickly, and if this has become an important issue, I'd recommend consulting with a lawyer. Finally, the answer may not be completely black and white, and a court might have to hear argument and decide the parties' rights in any given situation.