Insurance policies are to be interpreted in favor of the insured under Ohio law.

posted by Michael Fortney  |  Jan 17, 2012 2:26 PM in Insurance Law

In the insurance field the insured usually has no voice in the preparation of the insurance policy and typically a great disparity exists between the economic positions of the parties to a contract of insurance.  Furthermore, at the time an insured makes a claim it may be in dire financial straits and therefore may be especially vulnerable to oppressive tactics by an insurer seeking a settlement or a release.  Because of the nature of this relationship, Ohio courts interpret insurance policies in favor of the insured.

Insurance policies are drafted in a language selected by the insurer.  Where the policy language is reasonably open to different interpretations, it will be construed most favorably for the insured.  Dublin Building Systems v. Selective Ins. Co.  It is not the responsibility of the insured to guess whether certain occurrences will or will not be covered based on nonspecific and generic words or phrases that could be construed in a variety of ways.  Id.

When interpreting the terms of an insurance policy, the words are to be given their plain and ordinary meaning.  Gomolka v. State Farm Auto Mut. Ins. Co.  If those terms are susceptible to more than one interpretation, they “will be construed strictly against the insurer and liberally in favor of the insured.”  King v. Nationwide Ins. Co. 

Additionally, when an insurer claims that an exclusion applies the court’s will strictly construe the terms of the exclusion in favor of coverage.  To bar coverage an “exclusion in an insurance policy will be interpreted as only to that which is clearly intended to be excluded.”  Hybud Equip Corp. v. Sphere Drake Ins. Co. Ltd.  In order to defeat coverage, the “insurer must establish not merely that the policy is capable of the construction it favors, but rather that such interpretation is the only one that can fairly be placed on the language in question.  Anderson v. Highland House Co. 

Despite these well established legal doctrines, insurers are increasingly adopting policy interpretations that deny coverage based on their own self-serving interpretation and advance one-sided exclusion constructions to defeat coverage.  An insured should not blindly accept an insurer’s denial of coverage without consulting a lawyer versed in insurance law to determine whether the denial is valid.

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