Language in an insurance policy can be confusing and open to different interpretations, leading to coverage disputes between insureds and insurers. Sometimes, the confusion and disputes can revolve around little words that are common to everyday usage. As an example, consider the word "that."
Questions about the word "that" usually arise from its use in policy exclusions. For example, in the personal auto policy, there is an exclusion for liability coverage for property damage to property owned or being transported by "that insured," while another exclusion applies to property damage to property used by or in the care of "that insured."
So, if a wife runs into a car owned by her husband, would those exclusions apply to a liability claim made against her? And in the CGL form, the damage to property exclusions pertain to "that particular part" of property. So if the insured is repairing an electrical panel board in one room and somehow causes the board and electrical boards throughout the whole building to blow up, would the exclusions apply only to that particular panel board, or do they apply to the whole electrical system?
Presuming the offending insureds in these examples are found legally liable for the damage they caused, the exclusions do not apply. The phrases "that insured," and "that particular part," in my opinion, explicitly limit the scope of the exclusions to that specific, individual insured and that specific part of property on which the insured is working at the time of damage.
Those words could have been deleted from the policy exclusions, but they are there, and to what purpose but to limit the extent of the exclusions. This is in keeping with the accepted fact that exclusions are supposed to be interpreted narrowly and in favor of the insured if any reasonable ambiguity exists. Moreover, since the word "that" is not defined in the policies, the everyday dictionary definition has to be used: the person, thing, or idea specifically mentioned or understood; being the one specified.
Courts have offered differing opinions on the meaning and extent of "that insured" and "that particular part," with the opinions depending on the facts of the claim and the jurisdiction in which the case is heard. But, the guideline seems clear to me: "that" is a very specific term and needs to be applied in that way.
This blog post is meant to provide insights into insurance coverage issues in general, and does not necessarily account for the differences in law and practice in different venues. As such, the opinions expressed within should not be construed as legal advice for the unique circumstances of any particular claim or suit.
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