Filed Under:Agent Broker, Coverage Issues

Readers Weigh In on the Need for Insurance Policy ‘Legalese’

My blog of Sept. 29 about the need for greater simplicity in small-business insurance policies prompted a number of intriguing reader responses, running the gamut from those who were completely sympathetic to others who were totally dismissive.

Small-business consumers queried about their customer experience in a pair of focus groups run on behalf of Deloitte’s Center for Financial Services were nearly unanimous in their dissatisfaction with the way their insurance policies are drafted, complaining they appear to be “written by lawyers for lawyers.” 

He went on to explain that “a tactic often used is to assert one or more of the policy's provisions are ambiguous, since ambiguities in contracts of adhesion work to the benefit of the insurance customer.” As a consequence, he added, “insurers write their policies in language that judges (more lawyers) are least likely to consider ambiguous.”

This reader also pointed out that “since what is/isn't considered ambiguous varies from state to state, it's sometimes necessary to throw in multiple safeguards to preserve the extent of coverage that was priced for (and thus any hope of profitability for the insurer).”

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