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Fifth Circuit Refuses To Predict Texas Will Adopt a Sophisticated Insured Exception to Contra Proferentem

Texas has yet to address whether it recognizes a sophisticated insured exception to the doctrine of contra proferentem, and the state’s federal Court of Appeals declined an opportunity to make a prediction about that question in mid-August of this year in Certain Underwriters at Lloyds London v. Perraud, 2015 WL 4747318, 2015 U.S. App. LEXIS 14349 (5thCir., Aug. 12, 2015).  The judges split 2-1 on whether the contract of insurance was ambiguous in nature, but all three were unwilling to reach the sophisticated insured issue.  The case involved a director’s and officer’s (D&O) liability policy, but the issue implicates first-party coverage as well.  It also contains a useful survey of the approaches that courts have taken to this exception from

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About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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