In a recent decision, the California Court of Appeal demonstrated that it continues to apply rules of insurance policy interpretation that are favorable to policyholders. Rejecting an insurer’s strained readings of its policy exclusions, and its avails to optimal allocations of risk in construction projects, the court reaffirmed that the most reasonable reading of the policy would govern coverage, and that it would continue to read policy exclusions very narrowly—even in disputes between insurers and non-policyholders, and without respect to general notions of what policies should or should not cover.
Type: Client Alerts
A recent decision from the California Court of Appeal demonstrates how insurance policy interpretation should be done, in a case interpreting certain CGL policy exclusions for the first time in the state. Though the precise language at issue was new to the court, the decision should come as no surprise to those expecting courts to faithfully apply well-established rules of insurance policy interpretation.