ICAEW BL · Chapter 3 · Question 7 of 10
An insurance policy excludes cover for 'damage caused by water other than rainwater'. It is unclear whether this covers a burst pipe in the insured's office. How will the court resolve the ambiguity?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It will construe the clause against the insurer, as the party seeking to rely on it
Explanation
Under the contra proferentem rule, an ambiguous exclusion clause is interpreted against the party who wants to rely on it, usually the party that drafted it. The court resolves the ambiguity itself rather than leaving it to an expert. One ambiguous clause does not make the whole contract void.
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