D&O Policies and “Insured vs. Insured” Exclusion

Directors and officers liability insurance (referred to as D&O liability insurance) covers directors and officers for claims made against them while serving as a director and officer. In a nutshell, D&O liability insurance is an errors and omissions policy for directors and officers intended to cover alleged wrongful acts made by them.    D&O policies typically define an insured as any past, present, or future director or officer.

D&O policies contain an “Insured vs. Insured” exclusion. This exclusion applies to bar claims by one insured (officer or director) against another insured (officer or director). For instance, in Durant v. James, 41 Fla. L. Weekly D837b (Fla. 1st DCA 2016), a former director of a company sued a present officer and director. The First District held there was no coverage under the D&O policy per the “Insured vs. Insured” exclusion since the former officer and current officer were both insureds under the policy.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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