February 1, 2010

Exclusions are policy provisions that eliminate or restrict coverage for specific claims or losses. Their purpose is to clarify the grant of coverage.

Theoretically a policy could be drafted to contain no exclusions at all, perfectly expressing the insurer's intent of coverage so that it could be interpreted in no other way. Such a policy has yet to be developed and probably never will be. In fact, all D&O policies contain many often convoluted and ambiguous exclusions as well as exceptions to exclusions, and exceptions to exceptions to exclusions.