When business owners read their insurance policies, they often find words and terms that could mean different things. In New York last year, four out of ten insurance disputes started because policy terms weren’t clear. This issue affects many companies when they try to get their claims paid.
What makes policy language unclear?
Insurance policies become unclear when words or phrases have multiple meanings. Think of terms like “sudden” or “substantial” that insurers often use without explaining what they mean. Some policies also use industry terms without explaining them, which creates problems when businesses need to file claims.
New York court rules for unclear policies
Courts in New York follow strict rules when dealing with unclear insurance terms. Before looking at these rules, it’s worth noting that they aim to protect businesses from unfair claim denials.
Here’s how New York courts deal with unclear policy terms:
- They read unclear terms in favor of the business, not the insurance company.
- They look at what a typical business owner would think the policy means.
- They read the whole policy, not just single phrases.
- They check how other companies in the same field use these terms.
These rules help courts make fair decisions about insurance disputes. Insurance companies must now write more explicit policies to avoid problems later.
What this means for your business
The rules about unclear policy terms give businesses a better chance to win disputes. Here’s what you can do to protect your company:
- Keep records of all talks with your insurer.
- Write down any promises they make.
- Save emails about your policy.
- Ask questions about terms you don’t understand.
When you take these steps, you build a stronger case if you must challenge a denied claim.
Many businesses find out too late that their policies aren’t as straightforward as they thought. If your insurer denies your claim based on unclear policy terms, talking to a business insurance lawyer can help you understand your rights and next steps. They can spot issues you might miss and help you get the coverage you paid for.