Book Promotes Use of Plain Language in Insurance Contracts

Nowhere are examples of plain language more difficult to find than in the convoluted boilerplate and standard provisions of the traditional insurance contract. This fact comes as no surprise to anyone who has ever tried to interpret, construe, or enforce one. Accordingly, insurance contracts are fertile territory for advancing plain-language reform.

Blazing a trail into that territory is Kenneth S. Wollner, whose recently published treatise, How to Draft and Interpret Insurance Policies, makes a strong appeal to policy drafters to incorporate plain language into insurance policies (although the book successfully covers much more ground than that). Because, as Wollner points out, insurance policies are exempt from coverage under most so-called "Plain Language" statutes,* it is incumbent upon policy drafters to avoid the tempting convenience of mindlessly copying age-old precedent and to update existing forms to incorporate plain language. For those willing to make the effort, Wollner’s book is an essential resource, full of useful illustrations and drafting guidance written from over 30 years of insurance-industry experience by this attorney and underwriter turned insurance consultant. Moreover, in writing the treatise, Wollner practices what he preaches, making the nearly 300-page work a quick and easy read, without sacrificing substance.

The stated focus of Wollner’s book is the critical reading and writing of insurance-contract provisions with the goal of providing guidance on how to express coverage clearly and succinctly. This goal is an important one, not only because it advances the plain-language cause, but also, as Wollner points out, because the standards of interpretation applied by courts place a very heavy burden on the drafter to write clearly, unambiguously, and conspicuously—or risk an unwanted interpretation. At the same time, to a degree, court interpretations may actually serve as a disincentive to clearer drafting. For instance, the Insurance Services Office, a trade organization that drafts policy forms used by many insurance companies, will employ language in these forms that has been construed in a manner favorable to the insurer. Although clearer language could often be used to express the same concept, since it is unknown how the courts might ultimately interpret a plain-language redraft, there is a natural tendency to copy the favorable verbiage. This is particularly true of insurance contracts, given that principles applicable to their interpretation fundamentally, and sometimes irrationally, work to the advantage of insureds.

Wollner dedicates the first third of his treatise to how courts interpret insurance contracts and the context in which they are viewed. This approach is an effective one from a plain-language perspective because it highlights quite clearly the need to minimize ambiguity. It also is a perfect prelude to the second part of the book, which is a practical guide to identifying and avoiding ambiguity through the use of plain language.

This second part of Wollner’s book applies to drafting contracts generally—not just insurance contracts—so it has value to any attorney who is called on to draft an agreement. Wollner provides a series of illustrations highlighting common drafting problems in insurance policies and providing practical, plain-language solutions. Again, he attacks many of the same culprits that afflict legal drafting in so many contexts, not merely insurance contracts. For example, Wollner provides guidance on how to avoid the syntactical ambiguity that can arise from the imprecise use of and and or:

Similarly, on sentence length, Wollner offers this advice:

In a similar vein, Wollner demonstrates the benefits of appropriate sentence construction:

As demonstrated by these examples and noted previously, much of the drafting guidance Wollner provides applies to contracts generally. Accordingly, Wollner’s book is useful not only to the person drafting and negotiating insurance contracts, but also to the broader class of persons who draft and negotiate any type of contract.

The third and final part of Wollner’s book highlights a number of relevant considerations more narrowly of interest to the drafter of insurance contracts, such as legally mandated provisions and public-policy considerations. Although these topics are beyond the scope of the plain-language movement, they are a helpful resource to the insurance-contract drafter seeking the big picture. This third part is also of significant value to attorneys representing clients in coverage litigation.

Our only major criticism of Wollner’s book is that it was poorly proofread. While proofing oversights are inevitable, the relatively large number of errors in Wollner’s book tends to detract from the overall message he conveys.

Wollner’s book is a critical analysis of insurance contracts derived from the contra proferentem maxim of interpretation, that is, interpretation against the drafter. With its principal focus being the elimination of ambiguity, it convincingly advocates greater use of plain language in insurance contracts. More importantly, however, the book provides the necessary guidance to achieve plain-language in insurance contracts. From a plain-language perspective, therefore, the book deserves high marks and is a recommended read for anyone seeking to draft or negotiate clear and unambiguous contracts.