What happens to ambiguities found in insurance contracts?

In the context of insurance contracts, when ambiguities are identified, they are typically interpreted against the interests of the insurer. This principle is rooted in the concept of "contra proferentem," which holds that any unclear or ambiguous language in a contract should be construed in favor of the party that did not draft the agreement—in this case, the insured or policyholder. Insurers are responsible for drafting the policy language and should ensure it is clear and unambiguous. Therefore, if uncertainties arise, courts or arbitrators are likely to resolve them in a way that favors the insured, protecting them from potential unfairness arising from vague clauses. This interpretation reflects a broader legal principle aimed at promoting fairness in contractual relationships, particularly in sectors like insurance, where the policyholder is often at a disadvantage compared to the insurer's broader resources and expertise.