There’s a widespread false impression that claims for intentional conduct are usually 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 responsibility, and employment practices legal responsibility insurance policies usually present protection for claims alleging discrimination and wrongful termination. Many insurance policies do, nonetheless, comprise exclusions for fraud or dishonesty. Listed here are three suggestions to make sure protection is as broad as doable:
- Be sure that the language of any dishonesty exclusion particularly identifies the conduct that will likely be excluded. The exclusion mustn’t bar protection for “reckless” or “felony” conduct, as that might restrict protection for quite a lot of widespread claims.
- The appliance of any dishonesty exclusion needs to 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 state of affairs the place you’re relitigating the deserves of the underlying declare in a subsequent protection go well with.
- Embody 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.