Legal Memorandum: Interpretation of an Insurance Policy

Issue: Do insurance policies contain an express exclusion from coverage for a perpetrator’s sexual abuse under Vermont law?

Questions of insurance policy interpretation are questions of law for the court.  Concord Gen. Mut. Ins. Co. v. Madore, 882 A.2d 1152, 1155 (Vt. 2005).  Terms are to be interpreted in accord with their plain and popular meaning.  Id. at 1155.  Although ambiguous terms are to be construed in favor of coverage, where the terms are not ambiguous the insurer should have the benefit of them.  Id.   Thus, exclusions, specifically including sexual abuse exclusions, should be given effect, at least when not ambiguous.  Id.  (“The trial court concluded, and we agree, that the sexual molestation exclusion is both unambiguous and applicable to the underlying claim.”).

In virtually any case involving insurance policy construction, some argument can be made that a particular term or phrase is ambiguous, and thus it should be construed in favor of coverage.  Concord, 882 A.2d at 1155-56 upholds the enforcement of a sexual abuse exclusion generally.

[…]