There was an interesting take-away from one of the PLUS D&O Symposium sessions today I think might be worth sharing. The application of the concept extends to all insurance policies, not just D&O or E&O. This was the first time I had heard this particular concept expressed in this way.

In simple terms, from a legal standpoint, the burden of proof is shifted from the insurer to the insured when exclusionary language is moved from the exclusions section of a coverage form to the definitions section. This explains why the definitions sections in policies have been growing. When there is an interpretation in coverage to be made having the restrictive language reside in the definitions section allows the insurer to more safely interpret things in their favor without a court looking over their shoulder and applying the rules for contracts of adhesion we all know so well. The take-away was when possible to negotiate this stuff and to keep the definitions section in a policy as short and concise as possible with out a lot of “xyz does NOT mean or does NOT include exclusion”…

The above was shared by David Shaefer of AH&T Insurance.

To take a look at the PLUS blog go HERE

This entry was posted on Thursday, February 4th, 2010 at 5:48 pm and is filed under Risk Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.