Resolving Insurance Coverage Ambiguities: Discovery and Use of Extrinsic Evidence to Clarify Coverage

This CLE course will review the inconsistencies regarding when extrinsic evidence may be used to establish that a particular policy provision is ambiguous and discuss interpreting any ambiguity as well exceptions to the "four/eight corners" rule. The panel will focus on key jurisdictions and discuss what types of extrinsic evidence are most often turned to, what provisions cause the most difficult ambiguities and intentional ambiguity.

Ambiguity in insurance policies can be costly to insurers regardless of the type of policy. Moreover, parties can end up in expensive discovery disputes in coverage litigation over whether extrinsic evidence of meaning is discoverable.

Courts in different jurisdictions take various positions on core issues such as whether extrinsic evidence can be used to find ambiguity, distinguishing between obvious and latent ambiguities, and whether and what kind of extrinsic evidence can resolve ambiguities. Some states only allow such evidence in cases of fraud but encounter similar issues in establishing fraud.

Parties often argue over what types of interpretive materials are acceptable and if trade practices and other business practices are relevant. The definitions section of policies gives rise to ambiguity, but often, everyday terms are not defined at all.

Listen as this experienced panel explores how to approach claims and coverage resolution by focusing on the policy language.