Legal Memorandum: Interpretation of an Insurance Policy

Issue: Does the term ‘you’ as that term is used in an insurance policy have a clear meaning, or is that term ambiguous?

In Pekin Ins. Co. v. Benson, 306 Ill. App. 3d 367, 372, 714 N.E.2d 559, 563, appeal denied, 185 Ill. 2d 632, 720 N.E.2d 1095 (1999), the court noted that, in general, under Illinois law, “[i]n construing the provisions of an insurance policy, courts must examine the term used to ascertain the intentions of the parties” and that if the terms are unambiguous they will be given their plain and ordinary meanings.  The Pekin court also confirmed that “[i]nsurance policies should be interpreted as a whole, taking into consideration the type of insurance purchased, the risks involved, and the purpose of the policy.”  306 Ill. App. 3d at 372, 714 N.E.2d at 563.

Only a handful of cases around the country discuss the issue of whether the term “you” in an insurance policy is ambiguous and whether an employee of a named insured may fall within the definition of “you” for purposes of providing insurance coverage.  This issue is discussed in the cases of Rohe v. CNA Ins. Co., 312 Ill. App. 3d 123 (2000); Rosenberg v. Zurich Am. Ins. Co., 312 Ill. App. 3d 97 (2000); Economy Preferred Ins. Co. v. Jersey County Const., Inc., 246 Ill. App. 3d 387, 615 N.E.2d 1290 (1993); and Polzin v. Phoenix of Hartford Ins. Cos., 5 Ill. App. 3d 84, 283 N.E.2d 324 (1972).

In Minor v. Casualty Reciprocal Exchange, 700 So. 2d 951, 954 (La. Ct. App. […]