Trends in the case law tend to catch our attention, but often practitioners and clients become sidetracked and miss the connection to the insurance staple - general principles of insurance policy interpretation. It is essential that we are clever and creative when seeking coverage. However, it is imperative that we never stray from these general principles that, by definition, benefit policyholders.
General principles - some of which are evidenced in the cases in this week's newsletter - are a policyholder's home base and should neither be omitted from a case pressed against a recalcitrant carrier nor fall prey to an insurer's attempt to degrade their importance.
For example, when faced with two reasonable interpretations of a policy provision of how an insured acquires new property, the 8th Circuit relied upon the general principle that ambiguity should be construed in favor of the policyholder.
Similarly, a Texas appellate court struggled when two different sections of a policy could not be reconciled. In that decision the court fell back on the general principle that when a policy cannot be harmonized by giving effect to all of the clauses, it will adopt the interpretation that most favors coverage for the insured. Both cases, discussed in more detail below, are good reminders of the power of general principles of interpretation.
The surest way to simplify a coverage dispute is to demonstrate that, try as they might, a carrier's inability to reconcile rejection of coverage with general principles is in and of itself dispositive.