Broad-form exclusions

Used in D&ampO policies, refers to exclusions that use broad introductory or preamble language such as “based upon, arising out of or in any way related to.” This type of exclusion is in contrast to the narrower form of exclusion that uses the word “for” as the introductory or preamble language. The latter type exclusion is limited to claims that seek recovery for the injury or wrongdoing described in the exclusion. The former type exclusion, which is sometimes also referred to as an “absolute” exclusion, eliminates coverage not only “for” the referenced injury or wrongful act, but also for secondary-type claims (such as shareholder class action or derivative suits) that seek recovery from directors and officers for loss sustained by the company on account of the referenced injury or wrongdoing. For example, a “for” bodily injury exclusion eliminates coverage only with respect to claims against directors and officers by the persons who incur the bodily injury and who sue the directors and officers seeking recovery “for” their bodily injury. A shareholder suit against the directors and officers for loss to the shareholders or the company as a result of the bodily injury claim against the company would not be excluded under the narrower “for” type of exclusion because the shareholders are seeking recovery for financial loss to the company or the shareholders due to mismanagement or misrepresentations, not for bodily injury. However, the shareholder claim would be excluded under the broad form exclusion because the claim is “based upon, arising out of, or in any way related to” the bodily injury.

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