Interpreting Insurance Policy Language
- Topics:
- Fiduciary Liability
- Tags:
- Business Operations,
- Corporate Insurance,
- Finance,
- Financial Planning,
- Global Marketing Management,
- Insurance,
- Insurance Company,
- Policy Language
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Overview: Insurers are responsible for interpreting rather complex policy language that ordinarily has a legal as well as a commonsense meaning. This responsibility exists in an environment that is characterized by extensive competition in which customer service and good faith relationships with insured is vital to a company’s success. The insurance policy is first a legal contract, however, the ‘first party’ to that contract is the ‘average person’—an automobile driver, a property owner, or a business owner. Their expectations are based on their reasonable understandings of the policy language, what might be described as a commonsense meaning. Often when a claim is presented, the claims person calls in a legally trained expert who looks much deeper into policy language utilizing case law and a careful analysis to advise and support his or her client, the insurer. This article states that insurers should dispute coverage only in cases where commonsense as well as legal advice leads to the conclusion that coverage should not be afforded. If insurance professionals really wish to change the public’s perception, then they should be cognizant of the commonsense vs. legal interpretation conflict.
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Format: PDF | Size: 725KB | Date: Jan 2003 | Pages: 2
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