• Mississippi Supreme Court Holds Insured's Failure to Read Policy Does Not Excuse Insured From Clearly Stated Deductible
  • March 22, 2013 | Author: George B. Hall
  • Law Firm: Phelps Dunbar LLP - New Orleans Office
  • The Mississippi Supreme Court affirmed summary judgment that an insured is bound by the stated policy deductible, despite the insured’s claim that it was unaware of the policy deductible.  Southern Healthcare Services, Inc., et al. v. Lloyd's of London, et al., 2013 WL 628661 (Miss. Feb. 21, 2013).

    The insured maintained insurance for its management of nursing homes.  The insured’s original policy contained a $25,000 per claim deductible.  The following year, although the insured alleged to have requested similar coverage from its broker, the insurer issued a policy containing a $250,000 per claim deductible.  After a series of lawsuits against the insureds, the insurer gave notice that the insurer would defend and indemnify the insured only after the $250,000 deductibles were paid in full.  Litigation ensued, and the trial court granted summary judgment to the insurer.  The insured appealed.

    The Mississippi Supreme Court affirmed.  It found that the policy clearly and unambiguously identified the increased deductible.  There was evidence the insureds received a copy of the policy prior to renewal and, based on numerous references to the deductible throughout the policy, along with several pages referencing the deductible actually signed by the insureds, the insureds could not argue that they were unaware of the deductible when it was renewed.  Under Mississippi law, failure to read a policy is not a valid reason for not knowing its contents; a contracting party is under a legal obligation to read a contract before signing it and is charged with knowing the contents of any document that it executes.