Since the 2017 Annual Meeting, many changes have been made to the Liability Insurance project draft.  Sections 3 and 4, The Plain-Meaning Rule and Ambiguous Terms, have both been significantly revised to reflect the decision to adopt a plain meaning rule.

Black letter for each Section is included below.  The full draft contains Comments (with Illustrations) and Reporters’ Notes.

§ 3. The Plain-Meaning Rule

(1) The plain meaning of an insurance policy term is the single meaning to which the language of the term is reasonably susceptible when applied to facts of the claim at issue in the context of the entire insurance policy.

(2) If an insurance policy term has a plain meaning when applied to the facts of the claim at issue, the term is interpreted according to that meaning.

(3) An insurance policy term is ambiguous if there is more than one meaning to which the language of the term is reasonably susceptible when applied to the facts of the claim at issue in the context of the entire insurance policy. An ambiguous term is interpreted as specified in § 4.

 

§ 4. Ambiguous Terms

When an insurance policy term is ambiguous as defined in § 3(3), the term is interpreted against the party that supplied the term, unless that party persuades the court that a reasonable person in the policyholder’s position would not give the term that interpretation.

Tom Baker

Reporter, Liability Insurance Restatement

Tom Baker is the William Maul Measey Professor of Law and Health Sciences at Penn Law.   A preeminent scholar in insurance law, he explores insurance, risk, and responsibility using methods and perspectives drawn from economics, sociology, psychology, and history.

Kyle D. Logue

Associate Reporter, Liability Insurance Restatement

Kyle D. Logue is the Wade H. McCree and Dores M. McCree Collegiate Professor of Law at The University of Michigan Law School. He teaches and writes in the fields of insurance, torts, tax, and law and economics. In 201, he was awarded the Liberty Mutual Prize for the outstanding paper in the area of property and casualty insurance law.

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