Discusses in whole or in part indemnity provision in the CGL.
October 12, 2020 at 12:48 PM
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Summary: The purchase of insurance is just one of many ways that an entity can transfer all or portions of its risk. Insurance policies have often been referred to as policies of indemnity, or indemnification contracts, as well as contracts of adhesion. An insurance policy meets the description of both an indemnity contract and a contract of adhesion. A contract of indemnity is a legal agreement between two parties in which one party agrees to pay another party for a loss or damage that meets certain criteria and conditions, barring certain specified circumstances. An insurance contract is just one type of a contract of indemnity. A contract offered intact to one party by another under circumstances requiring the second party to accept or reject the contract in total without having the opportunity to bargain over the wording is a contract of adhesion. Insurance policies are contracts of adhesion and, as such, are construed strictly against the party writing them (i.e., the insurer).
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