October 10, 2019 Articles

Ambiguity: The Policyholder’s Best Friend

Ambiguity has always been a useful, indeed often dispositive, weapon for policyholders.

By Robert Chesler and Nicholas Insua

The rule of ambiguity in insurance policy construction has been highlighted in the past two years in both the American Law Institute’s Restatement of the Law of Liability Insurance and the case law. Ambiguity stems from the contractual doctrine of contra proferentem—the document is interpreted against the drafter. Because insurance policies are typically standardized adhesion policies drafted solely by the insurance company, they are typically subject to this doctrine. This article first examines The Restatement’s treatment of ambiguity and then discuss some of the 15 cases from the past two years applying ambiguity in order to find coverage.

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