Insurers as Contract Influencers lawreview - Minnesota Law Review
By DAVID A. HOFFMAN & RICK SWEDLOFF. Full Text. Contract boilerplate degrading consumers' litigation options is omnipresent, but a little mysterious. And that's not just because no one reads it. We know that terms mandating arbitration, exculpating liability, requiring individualized litigation, and shifting risk have proliferated in the last generation. But consumer contracts' production and lawreview - Minnesota Law Review
Contract boilerplate degrading consumers’ litigation options is omnipresent, but a little mysterious. And that’s not just because no one reads it. We know that terms mandating arbitration, exculpating liability, requiring individualized litigation, and shifting risk have proliferated in the last generation. But consumer contracts’ production and efficacy has been understudied. We bring to bear a new source of information about these questions from the insurance-as-governance literature, asking how insurers influence boilerplate’s adoption and content.
Interviewing participants in the liability insurance industry, we show that insurers refine boilerplate language, teach policyholders about its efficacy, and decline coverage when it is absent. At the same time, they rarely offer price breaks for adopting boilerplate, suggesting that at least some of the cost savings from consumer boilerplate may end up in the coffers of insurance firms rather than those of their clients. Insurers are surprisingly skeptical about the value of terms that have particularly ex cited proceduralists and consumer contract scholars—arbitration and liability waiver clauses—and believe their spread does not materially affect the risks that they insure. Overall, these qualitative findings suggest the value of a new, systematic approach to the study and regulation of boilerplate.
Executive Summary
The article examines the role of insurers in shaping contract boilerplate, revealing their influence on its adoption and content. Through interviews with liability insurance industry participants, the study finds that insurers refine boilerplate language, educate policyholders on its efficacy, and may decline coverage without it. However, they rarely offer price breaks for adopting boilerplate, suggesting potential cost savings for insurance firms. The findings highlight the need for a systematic approach to studying and regulating boilerplate.
Key Points
- ▸ Insurers influence contract boilerplate adoption and content
- ▸ Insurers refine boilerplate language and educate policyholders
- ▸ Insurers may decline coverage without boilerplate, but rarely offer price breaks
Merits
Novel Research Approach
The study's use of interviews with insurance industry participants provides new insights into the role of insurers in shaping contract boilerplate.
Demerits
Limited Generalizability
The qualitative findings may not be representative of the entire insurance industry or generalizable to other contexts.
Expert Commentary
The article sheds light on the significant influence of insurers on contract boilerplate, highlighting the need for a more nuanced understanding of the complex relationships between insurers, policyholders, and consumers. The findings suggest that insurers may be driving the proliferation of boilerplate contracts, which can have far-reaching consequences for consumers and the legal system. Further research is necessary to fully understand the implications of these findings and to inform evidence-based policy decisions.
Recommendations
- ✓ Conduct further research on the impact of boilerplate contracts on consumers and the legal system
- ✓ Develop and implement regulatory measures to protect consumers' rights and promote transparency in contract boilerplate
