There’s a frequent false impression that claims for intentional conduct usually are not coated beneath your insurance coverage coverage. In truth, insurance coverage insurance policies generally present protection for intentional misconduct. For instance, administrators and officers legal responsibility insurance coverage insurance policies usually present protection for securities fraud and breach of fiduciary obligation, and employment practices legal responsibility insurance policies usually present protection for claims alleging discrimination and wrongful termination. Many insurance policies do, nevertheless, include exclusions for fraud or dishonesty. Listed here are three ideas to make sure protection is as broad as doable:
- Guarantee that the language of any dishonesty exclusion particularly identifies the conduct that can be excluded. The exclusion shouldn’t bar protection for “reckless” or “legal” conduct, as that might restrict protection for quite a lot of frequent claims.
- The applying of any dishonesty exclusion must be tied to a remaining adjudication within the underlying case. Together with this language will assist protect protection for protection prices and presumably settlements, and assist keep away from a situation the place you might be relitigating the deserves of the underlying declare in a subsequent protection swimsuit.
- Embrace a severability clause in any dishonesty exclusion in order that the exclusion solely applies to a foul actor. This manner, the exclusion doesn’t bar protection as to any harmless insureds.