Duhaime's Law Dictionary

Policy Definition:

Planning decisions of a government agency; also, an insurance contract.

Related Terms: Insurance, Regulation

(1) A planning decision of a public agency or (2) a contract of insurance.

1. Planning Decision of a Public Agency

In Just, Justice McLachlin wrote:

"In general, policy refers to a decision of a public body at the planning level involving the allocation of scarce resources or balancing such factors as efficiency and thrift. The operational function of government, by contrast, involves the use of governmental powers for the purpose of implementing, giving effect to or enforcing compliance with the general or specific goals of a policy decision....

"One hallmark of a policy, as opposed to an operational, decision is that it involves planning....

"A second characteristic of a policy decision as opposed to an operational function is that a policy decision involves allocating resources and balancing factors such as efficiency or thrift."

In Alliance for Open Society International, Justice Victor Marrero of the United States District Court (New York) suggested that policy could be "general principles by which a government is guided", before concluding:

"[P]olicy is not just a set of abstract disembodied words that have no bearing on or connection to an organization's conduct. Rather, the term constitutes an expression of principle that sets forth, mirrors and guides an organization's conduct along the paths of its mission and purposes."

In Goldsmith v. Snohomish County, Madam Justice Marsha Pechman of the same court sitting in Seattle wrote:

"A policy is a deliberate choice to follow a course of action made from among various alternatives by the official or officials responsible for establishing final policy with respect to the subject matter in question.'"

2. Contract of Insurance

In Spath (1994), Justice Sutherland wrote:

"An insurance policy is generally understood as an instrument, directed to the insured or his or her representatives, evidencing a contract of insurance for the benefit of named insureds."


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