Where an insurance policy's exclusion clause refers only to 'Loss' but the policy as a whole (including advance payment provisions) treats Loss and Defence Costs together, the exclusion operates to exclude both Loss and Defence Costs. The contra proferentem rule does not apply where the ambiguity in an exclusion clause is resolved by reading the clause in the context of the policy as a whole. A literal interpretation of an exclusion clause that would produce the uncommercial result of obliging an insurer to pay Defence Costs for claims clearly excluded from coverage will not be adopted.
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