Ambiguity rule

Updated: Aug 20, 2021

A US legal rule which requires judges to construe ambiguities (expressions that can be given more than one acceptable interpretation) in insurance contracts against the insurer and therefore in favour of the insured. To prevail in a coverage dispute an insured party need only demonstrate that their interpretation of the contract is reasonable to establish that the contract is ambiguous.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.