Missouri Insurance Lawyer Blog

In an action by an insurer seeking a declaration that it was not liable under a professional liability insurance policy for the acts of a psychologist who treated a victim of sexual abuse but failed to report the abuse, summary judgment for insurer is reversed where the "knowingly wrongful" exclusion in the policy on which the order was based was ambiguous. The court noted that in order for an act to be intentional for purposes of Missouri tort law as well as of exclusionary clauses in liability insurance policies . . . the actor must desire
to cause the consequences of the act, or the consequences must be substantially certain
to result." the court conclude the knowingly wrongful act exclusion was reasonably subject to different interpretations. The court noted that to entertain a contrary view would work an exclusion from coverage of many, if not most, claims for damages arising out of the negligence of insureds and thus defeat the primary purpose for which liability insurance coverage is purchased.

When an insurance company fails to express itself clearly its policy can be construed against it based upon an ambiguity. In Missouri ambiguity has been described as language which is fairly susceptible of more than one interpretation. It arises where there is duplicity, indistinctness or uncertainty in the meaning of the words appearing in the insurance contract. In other words an ambiguity is an expression in the contract, that when applied to a specific fact situation creates an uncertainty as to whether coverage does or does not exists based upon the agreement itself.
Ambiguity is only one possible theory to defeat an insurance companies denial of coverage. Anyone who has received an insurance coverage denial should consult with a Missouri attorney experienced in insurance law.

The Missouri Court of Appeals recently rejected the appeal of an insurance company which sought to escape their duty to defend and indemnify a 15 year old unlicensed driver.  The case arose out of a one car accident which resulted in personal injuries to the passenger. 

The insurance company claimed an exclusionary provision precluded coverage for "any person" operating a vehicle without a reasonable belief that the person is entitled to do so.  The term "any person" was not defined in the policy.  Relying on the doctrine of ambiguity the trial court found the term to be ambiguous when reading the policy as a whole.  On appeal the Missouri Eastern District agreed finding that the policy term could be read by a lay person as either referring to any defined insured or a global term referring to anyone other than a defined insured.  The court upheld the trial court's decision which arose procedurally from cross motion for summary judgment. The case is Miller's Classified Ins. Co. v. Aimee French, et al, Missouri Court of Appeals, E.D. Appeal No. ED82306. 

Insurance companies deny coverage for any number of reasons. However, the fact that you have received a denial of your insurance your claim should not be the end of your fight.  Insurance companies are often wrong in their assertions of no coverage, and there are several legal rules which may help your case. One of the most powerful rules that can help people fighting an insurance company on coverage is the doctrine of ambiguity. Simply put if the language of the insurance policy is ambiguous it must be construed by a court in favor of the insured (the policy holder or beneficiary) rather than in the favor of the insurance company.  The reasoning behind this rule arises from the fact that insurance companies use form contracts that they write and issue, so if a dispute is over their failure to make the contract clear then they are the ones who should bear that burden.

As a result of this rule many lawsuits over coverage focus on whether or not an ambiguity exists in the policy.  Generally speaking a policy is ambiguous if there is doubt about its meaning, duplicity or uncertainty about the language as applied to the facts of the case.  This rule has also been expressed as a contract that promises something in one section and then takes it away in another.  While the explanation of what an ambiguity appears simple, in application an ambiguity may be quite complex.  It is also possible that an ambiguity may arise from a document other than the actual contract language such as the application for coverage.  The important thing to remember is that when your coverage claim is denied you do not have to accept the insurance company's position.  There are legal rules that help policy holders, which may apply in your particular circumstances.  Consultation with an attorney regarding your particular situation may turn a denial into a recovery.

If you need assistance contact Chris Faiella, with the law firm of Tatlow, Gump & Faiella at 1-800-264-3455 for a free, consultation.  Chris will help you determine your options and advise you as to the course of action that will best suit your individual situation.