An appeal court in the US state of Virginia has reaffirmed the caution to resist the temptation to find ambiguity in the wording of a policy (and therefore any contract). A great many words – viewed in isolation – have alternative, and sometimes quite different, dictionary meanings. We must resist the temptation to “give up quickly on the search for a plain meaning by resorting to that truism.” Policy language is only ambiguous where there are competing interpretations that are equally possible, given the text and context of the provision. The mere fact that the parties disagree on the meaning of the terms of a provision does not necessarily render those terms ambiguous.
An insurance policy is a contract like any other contract and the words used are given their ordinary and customary meaning if they are not defined within that context and purpose. Language in a policy purporting to exclude events from coverage will be construed against the insurer.
These principles apply equally in South Africa.