Insurance - Forms And Policy Writing
( Originally Published 1911 )
Forms.—The form is that part of the contract added to the policy to describe the property insured. It may be written or typed directly on the policy itself in the blank space provided, but as a rule it is a separate sheet attached to the policy.
The purpose of the form is to give the location of the property, a description to show what is covered, and it may or may not contain a memorandum as to the clauses which are to be added; that is, the form may merely indicate which clauses the company may add in writing the policy, or in case of large properties, it may contain these forms all duly printed. All companies have sets of forms for the more common kinds of risks, such as buildings, household furniture, churches, and properties of like nature.
In the case of manufacturing or mercantile occupancies a specific form applying to the individual risk is, or should be, drafted. In the case of larger properties where there are a good many companies on the risk it is customary to have printed forms, which are complete in themselves. In the case of smaller risks they may be merely typewritten.
Example A below is a form used covering buildings, while Example B is a form used for covering contents.
.......On the.. .building and additions, including steam, gas and water pipes, fittings and fixtures, plumbing, heating and lighting apparatus and fixtures, dynamos, motors, engines, boilers, pumps, tanks, elevators, with appurtenances and connections, cabinet work, fixed mirrors and their frames, plain, plate and ornamental glass, frescoes, papers and decorations, window shades, carpets, oil cloth on halls and stairs, awnings, skylights, fire escapes, yard fences and fixtures, vaults, stoops, railings, flagging and all permanent fixtures belonging to the building situate No
HOUSEHOLD FURNITURE FORM ......................................................................
On household and kitchen furniture, within or attached to building, useful and ornamental, including beds, bedding, linen, wearing apparel and materials for same, umbrellas, canes, billiard and pool tables with appurtenances, tool chests and tools, trunks, toys, fishing rods and tackle, guns, bicycles, photographic cameras, baby carriages and games, sporting goods, and all articles used for amusement, travel, study or research, printed books and music, pictures, paintings and engravings and their frames (at not exceeding cost price), and shadow boxes, chandeliers, gas and electric light fixtures, bronzes, statuary and other works of art and objects of virtu, pianofortes, organs and other musical instruments, scientific instruments, sewing machines, curtains, portieres, window screens, window shades, carpets, oilcloth and other floor coverings in halls and on stairs, stoves, plate, plated ware, diamonds and other precious stones, jewelry and watches in use, clocks, mirrors, china, glass and crockery ware, fuel, food and family stores, the property of the assured .......................................................................................
or any member of the family, household guests or servants, all while contained in, on and or about or attached to the .........................................
....... building and additions, extensions and connections occupied as ...............
dwelling, situate ............................................................
The entire question of form writing and its possibilities will be appreciated when it is stated that there are several thousand forms in common use in the United States. These are printed forms and do not include the typewritten forms which may be prepared for a special case or where only one or two copies may be needed. The policy itself, since it has become standardized, does not present any opportunity for the use of variation in that portion of the insurance contract, but on the form itself, which is still permitted to be drafted, there, is a large opportunity.
The form attempts to accomplish the following:
(a) To give the exact location of the risk.
(b) To give the correct name of the insured.
(c) To state the property covered.
(d) To give such a description of the property as will make it clear beyond peradventure what the insured wishes to have covered and what the company is assuming to insure.
(e) It will contain at least a notation that certain clauses are to be added to the policy.
(f) It may contain the clauses themselves printed in full. It is well to remember that all of the cases which have come into the courts concerning fire insurance policies have arisen from a failure to make clear in the policy contract just what was intended to be insured.
Drafting a form.—To draft a form which will accomplish its intended purpose is one of the most important features of the insurance business and concerning which there is not the fullest intelligence. The tendency in nearly all forms is to overdo and use more words than are necessary. A short statement, clear, concise, and comprehensive, is. far better than a long rambling one lacking these qualities.
The insured constantly seeks to use general language to make the insurance as broad as possible, and practically requiring the company to insure everything he may have on the premises at the time of the fire. The in-surer, on the other hand, always seeks for the specific, that is, the company always wishes to know what it is doing. An insurance company never desires to cover, for its own interest, if' it can avoid doing so, an indefinite thing; it always desires the positive. It is evident that between two such opposites there will be more or less effort to gain their individual ends, the insured seeking the general and the company the specific.
Printed forms: From the viewpoint of the insured the danger in printed forms lies in the fact that such forms may not have been drafted originally to cover his property but may be adapted forms from some other risk. It has happened from such causes that at the time of a loss the policy appeared to cover a great many things but apparently did not cover those things which the insured wished to have covered. There is al-ways risk in adopting the ready-made article, the danger being that it takes too much for granted and does not carefully consider the personal aspect of each and every risk, especially where the risk passes at all beyond the ordinary hazard. The insured or his representative should always take great care that the form is drafted accurately; as briefly as possible; in general terms where permissible; and completely describing the business and the things which he wishes covered.
Volumes have been written concerning forms, but the entire subject may be included in the rules laid down, viz : The form should be explicit and avoid all indefinite expressions. The question is "What does the party wish to insure?" and adequate language should be used to describe it.
Another point to be mentioned in this connection, is the effect upon the interests of the insured and insurer as to whether the one or the other prepared the form. It is an accepted principle in the construction of con-tracts that doubtful or indefinite language will be construed against the person who drafted the document. This is true in the case of the insurance contract as it is in any other. When all policies and forms were pre-pared by the companies there was no question as to whom the language would be construed to favor. In case of doubt it would be against the company. In these days when the employment of brokers is becoming well-nigh universal and the form for the insured is prepared by his representative, the broker, it becomes the language of the insured, and as such would be construed against him in the event of a loss.
Concurrent policies.--It is perhaps needless to point out that all policies should be concurrent, i. e., they should agree word for word and letter for letter. Some of the most difficult problems in the settlement of losses have occurred owing to the non-concurrency of the policies covering the risk. All the various rules drafted for the settlement of such losses would have been avoided if sufficient care had been exercised in the be-ginning that the policies covered alike. Too much emphasis cannot be laid upon the fact that the most extreme care should be exercised in this respect.