Comments on: Is Uncertainty Over the Meaning of “Occurrence” Susceptible to a Drafting Solution?

By: Kirk Hartley Offers Commentary On My Post Regarding The Definition of Occurrence in Insurance Policies « Corporate Insurance Blog

Sun, 14 Jun 2009 01:47:54 +0000

[...] says that it’s “[a]n interesting post,” the original and complete version of which is found over at the Adams Drafting blog, [...]

By: Denny Jarman

Denny Jarman — Fri, 12 Jun 2009 15:23:09 +0000

“An occurrence is an accident or event including continuous or repeated exposure to the same general conditions.” This is the 1966 CGL language. (Not applicable to vehicles which are pure “accident” policies.)

Thus occurrence is an accident but it broad than only an accident. It is also an event. And it is also “exposure” in a limited context.

What’s funny is that insurers added the exposure to avoid having to pay more than one per occurrence limit but ultimately they ended up with the continuous trigger which broadened their coverage which now they have to exclude (better chance for policyholders.)

The drafting history of all of the insurance provisions is available through ISO, NUCO and other industry resources and gives you the industry perspective.

Then, you have case law which will give you the judicial perspective.

And, if you are a creative policyholder lawyer, you can also develop a meaning for some unprecedent “accident,” “event” or exposure which can use both the drafting history and judicial perspective to arrive at where the policyholder would expect to have coverage.

It is a living process and try as insurers might, we will use language in a way in which we attempt to give meaning to the promises for which insurers take premium.

By: Art

Art — Fri, 12 Jun 2009 12:53:55 +0000

This has parallels with the word “reasonable”, which has been worked over in court countless times in all kind of scenarios. While its meaning in each case remains a question of fact, and while the word is inherently vague, the approach to interpreting it is still far better understood than similar words that could be used in its place – “fair” or “sensible”, for instance.

“Occurrence” seems to have the same advantage, having accumulated layers of understanding over the last 40 years. If a solution were to be sought by replacing it with a new word, drafters would lose all of that, and there is no suggestion that anything better exists for the long run.