PJC Business

PJC 101.56

C ONTRACTS

PJC 101.56 Insurance Contracts Distinguished from Other Contracts (Comment) In most insurance breach-of-contract cases, there is no dispute about whether the parties had an agreement, because the insurance policy is the agreement. In these cases, the general PJC 101.1 question asking whether the parties had an agreement is unnecessary. Common disputed issues are whether an event is covered or excluded by specific policy language, whether another contractual defense or limitation applies, or the amount of the covered loss. The following alternative questions focus on those issues. PJC 101.57 asks whether the insurer breached the agreement by failing to pay a covered claim, which is defined by the applicable policy language. If the jury finds breach of the agreement, then PJC 101.58 asks the jury to deter mine causation and damages. The question asks the amount of the covered loss, if any, and instructs the jury to exclude any amount that was not covered. Because PJC 101.58 asks only about the amount of policy benefits, when consequential damages are sought, a separate question and instructions on damages as in PJC 115.3–115.5 are also required. Often there is no dispute that the insurer has not paid the insured, so that a finding of covered damages necessarily means that the insurer failed to comply with the agree ment. When it is stipulated or undisputed that a finding of covered damages estab lishes the insurer’s breach, the preliminary liability question in PJC 101.57 may be omitted, because the finding of covered damages in 101.58 is sufficient to establish liability. PJC 101.59 asks whether a loss or event is excluded by specific policy language. The question may be adapted to submit other limitations, avoidances, and policy defenses.

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