December 4, 2014
To most people – including attorneys – insurance policy provisions are arcane. Despite the insurance industry’s effort, beginning in the 1970’s, to substitute “simplified language” for traditional legalese, the perception remains.
Why? And how can Miller’s Standard Insurance Policies Annotated® help you decipher insurance policy provisions with authoritative case law?
- The concept of insurance is ancient. Insurance is one of the oldest industries known to civilization. Thousands of years ago, a group of Chinese merchants protected themselves against financial ruin by dividing their cargoes among several boats before sending their goods to market via river trade routes. That way, if one boat was smashed to pieces by treacherous rapids, no one merchant lost all of his goods. Each merchant stood to lose only a small portion. Those merchants minimized the losses of a few by spreading the cost among the many.
- The business of insurance is old. It began with the infamous “Great Fire of London” that raged for five days in 1666, ravaging the City, destroying some 14,000 buildings and leaving 200,000 people homeless. The first insurance companies were established in London shortly thereafter, including a company called “Contributors for Insuring Houses, Chambers or Rooms from Loss by Fire, by Amicable Contribution” founded in 1696 at Tom’s Coffee House on St. Martin’s Lane in London, later called “Hand in Hand Fire & Life Insurance Society.”
In 1752, Benjamin Franklin founded the first fire insurance company in the Americas, “The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire”, also known as “Hand in Hand” and eventually acquired by Commercial Union Insurance Company.
- The policy language is old. “Simplified language” was not a priority for the early insurance companies. The terms of coverage were written by a well-educated few, in esoteric language that resembled their company names – lengthy and unintelligible to most people.
In the 19th Century, the business of insurance expanded beyond the risk of property loss to provide coverage for the risk of personal and business liability. The first auto insurance policy – which was actually a policy for horse-drawn carriages revised to cover an automobile – was sold in Connecticut in 1887.
The Language Remains: Many “old” coverage provisions, somewhat re-worded, are still found in policies sold today. Homeowners and Commercial Property policies still use the terms:
- “Act or Neglect”,
- “Inland Marine Coverage”,
- “Proof of Loss” and
- “Sue and Labor.”
Liability policies routinely sold to business and industry, premises owners, and working professionals include phrases that are newer but no less arcane. For example, what is meant by:
- “Work that has not yet been completed or abandoned”?
- “A claim ‘first made’ during the policy period”? Or
- “Trucking for Non-Trucking Use”?
What If? The best way to decipher an elusive provision of a contract – including an insurance policy – is to observe that provision in operation. What does it do? Or fail to do?
What if, starting with the policy provision itself – whether it is familiar to you or not – you could proceed directly to cases that interpret that provision in a factual context? Cases in which insurers interpreted the provision in a manner that precluded coverage, but policyholders, or injured third parties, interpreted that same provision in a manner that favored coverage?
You Can Do That! Miller’s annotates the most commonly marketed and sold property/casualty insurance coverage forms in the United States – more than 100 policies and 1,000 endorsements. Given a coverage dispute, it is likely that one or more forms included in Miller’s will include the policy provision at issue.
If you don’t know which policy or endorsement contains the provision you are looking for, “Miller’s Index” will lead you to the form(s) that contains that provision. “Miller’s Index” is the most comprehensive index of property/casualty provisions available today, with more than 16,000 references to each provision that appears in Miller’s policies and endorsements.
Once you have identified the provision at issue, you can link directly to Miller’s annotations. The annotations include summary comments on each case and indicate which party prevailed on the coverage issue – the insurance company, the policyholder or a third party, such as a mortgagor or injured plaintiff. From there, you can link to the reported decisions that discuss that provision in depth.
With Miller’s you can lift the curtain behind the policy language, and see how that language operates at the core of a dispute. You’ll understand why that provision appears in the policy, as well as whether and how it applies in each case.
Miller’s Saves Time and Money: Miller’s was first published in 1986. Many things have changed for the better since then, especially our legal research tools. Yet time is still precious, legal services still expensive, and attorneys and clients still expect value in their search for reliable information.
At some point in your practice, or in your daily life, you will confront an issue of insurance coverage. I recommend that you try Miller’s. It is the quickest, easiest way to decipher troublesome policy provisions with authoritative case law that answers your coverage question.
True Story: Several years ago, before Miller’s was acquired by West, I received a call from a young associate of a mid-size law firm. He phoned to order a copy of Miller’s printed set for the firm, with his partner’s approval, and to thank me. He explained.
Several days earlier, the partner had assigned to him the research on a complicated issue of coverage. The policy was General Liability, with several arguably applicable exclusions and endorsements. Feeling overwhelmed by policy language he did not understand, the associate met his friends at a local bar that Friday night before St. Patrick’s Day, crying in his green beer that his entire weekend had just been “destroyed.”
A friend suggested that he “Use Miller’s.” When the associate asked, “What’s that?” the friend offered to meet at his office on Saturday morning. According to the associate, he identified the cases he needed within an hour and prepared a draft for the partner by late Saturday afternoon. No doubt he spent the rest of the weekend celebrating his Irish heritage.
Miller’s Today: Miller’s is now available in a 14-volume printed set. It is also available on Westlaw® and Westlaw Next® with the same policies and endorsements in 15 lines of coverage, 198,000 annotations and “Miller’s Index” also available in print.
Once you have identified a coverage provision, Miller’s will tell you whether, when, where and how that provision has been interpreted and applied – even if the provision is unfamiliar to you.
Before you know it, that arcane language will be just another old friend.
In my next post in this series I will look at whether there is insurance coverage for what happened in Ferguson, Missouri.