HNRK Coverage Corner

On December 26, 2023, the Second Circuit issued a decision in Ezrasons, Inc. v. The Travelers Indemnity Co., Docket No. 22-766, construing an ambiguous provision in a marine cargo insurance policy in favor of the insured under the doctrine of contra proferentem.

As the Second Circuit explained: “When dealing with insurance policies, it is a ‘fundamental’ principle of New York law that ambiguities should be interpreted against the insurer and in favor of the insured.” This rule of construction (which we have discussed in previous posts) is an application of the contra ...

On May 11, 2022, Justice Lebovits of the New York County Supreme Court issued a decision in Century Indemnity Company v. Brooklyn Union Gas Company, 2022 N.Y. Slip Op. 50388(U), holding that the doctrine of contra proferentem (construing ambiguous contract language against the drafter) “does not govern interpretation of insurance policies when the policyholder is sophisticated.”

A leading insurance treatise explains contra proferentem and its application to insurance disputes as follows:

The most frequently employed principle of interpretation . . . is contra ...