A recent UK decision made some interesting remarks regarding the interpretation of an insurance policy which should be no different in South Africa:

  1. The wording of the schedule and the policy wording must be considered together without giving greater weight to either.
  2. The fact that clearer words could have been used does not mean that the court must construe the policy as it might have been drafted rather than as it is drafted.
  3. Aggregation clauses (eg ‘one original cause’ clauses) sometimes favour the insured and sometimes the insurer so that they must not be approached with a predisposition towards either a broad or a narrow interpretation.
  4. One must not strain to find ambiguity and then apply the contra proferentem rule (ie interpreting against the party that drafted the contract) because this rule is only applied in cases of real doubt. The rule should not be applied for the purpose of creating doubt or magnifying an ambiguity when the circumstances of the case raise no real difficulty.
  5. The court remarked that in ‘frequently used, modified and revised policies of insurance, neatness and elegance are often lost’. That does not mean that a meaning must be rejected because the wording might have been better expressed.

The facts of the case will be found here, Spire Healthcare Limited v Royal & Sun Alliance Insurance Plc.