One of the standard exclusion found in directors and officers insurance policies does not provide coverage for claims brought by one insured against another insured. This is called Insured vs. Insured exclusion. The primary purpose of this exclusion is “to exclude collusion between insured parties. This clause ensures that there are no boardroom battles between the insured’s by having one executive sue another and then claiming under insurance.
This exclusion can be covered to some extent as a carve back where claims brought by a shareholder of the company which is instigated and continued totally independent of, and totally without the solicitation, active participation, or intervention of, any director or officer of the company can be picked under the insurance.
You may reach out to PlanCover.com for further advice and guidance in structuring the right D&O liability insurance for your company.
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