Is Exclusionary Language Holding Insurance Back?
I had an incredible conversation with a close client about the language of insurance contracts. We were discussing the plight of Hiscox which has been attacked in the press through its refusal to pay certain BI claims made during the pandemic.
Whether or the not the claims are valid is not something I have enough information to discuss however the sheer volume of disputed claims and the level of progress made against Hiscox in this motion is evidence that there is certainly some debate around the issue and therefore some validity to the claims.
Coverage shouldnt be a complicated issue. Both Insurer and Insured should be clear on what is covered but evidently this isnt the case. In 2020 we should not have lawyers debating intention. Contracts should be clear on coverage, if it says "all perils" that is what it should mean. We should not be dealing with unforseen situations because there will always be something that is "unprecedented", the word "unprecendented" means exactly that.
The exclusionary language used in insurance contracts assumes everything is covered with the exception of the exclusions. Surely it would be better to offer contracts which from a point of what is covered rather than what is not and they are priced accordingly.
It would be easy to argue that this is not needed and the policy wording means the same thing from whatever perspective it is written however as the Hiscox case has shown if the 2 parties to an insurance contract cannot agree what the contract covers and what it does not then the contract wording has failed by default.
Simplicity and transparency are the virtues of good business. My concern is that if the industry cant move to amend these historic inefficiencies then it will fall behind grass roots new entrants who take a simpler, clearer approach