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When both the insurer and the insured have valid arguments over claim disputes, how does a court decide in favor of one over the other?

In Massachusetts, when an insured’s act falls within an exclusion in the policy, the insurance company may be entitled to declaratory or summary judgment, which ultimately relieves it from its contractual duty to defend.  Policies, however, are to be construed strictly against insurers when courts analyze any ambiguity.  Insurance companies and policyholders become frustrated with the courts when they attempt to strike a balance between the competing interests: insurance companies believe they should not be required to pay for a policyholder’s litigation when it is the insurance company’s belief that the behavior falls explicitly within an exception.  Contrasting the insurance companies interest is that of the policyholders, who, as consumers, believe they are entitled to protection when there are differing interpretations because they did not drafted the policies, but merely assented to them.