Part II The Bermuda Form in Detail, 4 Law of Construction and Interpretation Clause

Subject(s):

Construction of contract — Applicable law — Insurance

This chapter focuses on Article VI.O of the Bermuda Form XL004, the Law of Construction and Interpretation Clause. Article VI.O does not merely adopt a system of law to govern the parties' contractual rights, It also engages in a profound modification of the chosen law and carves out from the corpus of New York law certain principles and canons of construction that would, from an insurer's perspective, be unduly favourable to policyholders and that might otherwise apply. The chapter discusses the structure of Article VI.O, summary of Article VI.O, prohibited principles, and the basic legal principles of construction under New York law that are consistent with an even-handed approach to contractual interpretation.