Policyholder Pulse
Some of the biggest pitfalls for policyholders lie camouflaged among seemingly “standard” policy conditions—often overlooked during the procurement or renewal process. This is especially true of
allocation clauses, found most commonly in Directors & Officers (D&O), Errors & Omissions (E&O), and Professional Liability (PL) policies. In our policyholder-side coverage practice, we are seeing insurers relying on these clauses more and more as an excuse to pay only a small fraction of the defense in mixed-claim cases, i.e., suits involving both clearly covered claims and claims that the insurer contends are not covered. We urge policyholders and brokers to review such clauses carefully and seek to modify them as necessary to ensure the complete defense to which the policyholder is entitled under the law.
Published on:
Allocation Clauses in D&O and E&O Policies – Traps for the Unwary
