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Legal Memorandum: Ambiguous Insurance Policy in VI

Issue: When is an insurance policy deemed ambiguous under the laws of the Virgin Islands?

Area of Law: Insurance Law
Keywords: Ambiguous insurance policy; Interpretations; Construed against the insurer
Jurisdiction: Federal, Virgin Islands
Cited Cases: None
Cited Statutes: None
Date: 03/01/2005

To the extent the court concludes that two different interpretations of a provision in a policy are reasonable, the provision is “ambiguous” by definition.  See Emerson Radio Corp. v. Orion Sales, Inc., 253 F.3d 159, 164 (3d Cir. 2001) (“[A]n agreement is ambiguous if it is susceptible to more than one meaning.”).  Once the court concludes insurance policy language is ambiguous, the “policy must be construed against the insurer, and in a manner more favorable to coverage.  If there is more than one reasonable reading of a policy provision, as is the case here, that provision must be construed against the insurance company which drafted it.”  Coakley Bay Condo. Ass’n v. Continental Ins. Co., 770 F. Supp. 1046, 1051 (D.V.I. 1991) (quoting Buntin v.Continental Ins. Co., 583 F.2d 1201, 1207 (3d Cir. 1978)).

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