What is an Exclusion?
Exclusion may refer to the act of omitting or denying something, or the state of being excluded. In the context of D&O insurance, an exclusion is a type of clause in the policy that eliminates coverage for certain risks or liabilities. This means that the insurer will not be responsible for any losses or damages that are related to the excluded risks or liabilities.
Exclusion in More Detail
Exclusions are typically used to limit the insurer’s liability in the event of a claim. For example, an insurer may exclude coverage for certain types of damages, such as those resulting from illegal activities or intentional acts. Other common exclusions include losses resulting from financial mismanagement, breach of contract, and professional negligence.
Exclusions are an important part of any D&O insurance policy, as they help to ensure that the insurer is not liable for risks or liabilities that it is not willing to assume. It is important for policyholders to understand the scope of the exclusions in their policy, as this will help to ensure that they are adequately covered in the event of a claim.
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