Absolute Exclusions Explained
Absolute Exclusions def: Exclusions found within certain insurance policy forms, precluding coverage for claims that are remotely—but not directly—related to the actual nature of the exclusion. The effect of such language is to defeat coverage in situations where it could be reasonably expected that coverage would apply. For example, an absolute exclusion in a policy written to cover insurance agents’ errors and omissions (E&O) exposures might read as follows: “This Policy does not apply to any ‘Claim’ against the ‘Insured’ … based on or directly or indirectly arising out of or relating to any actual or alleged ‘bodily injury.'” Assume, for example, that an insurance agent failed to secure bodily injury (BI) liability coverage for a client and the client is later held liable for BI. The client then sues the agent for failing to obtain an appropriate insurance policy. Given the wording of the “absolute” exclusion noted above, the agent’s policy may not respond to the claim. This is because the client’s allegation indirectly arose from and was “related to” BI. In recent years, these “absolute” exclusions have become more common, and insurers have, with increasing frequency, been using them to deny coverage of claims that would otherwise appear to be covered.
More About ALIGNED Insurance
ALIGNED specializes in delivering insurance and risk management solutions exclusively to Canadian businesses. Through our 18 points of differentiation and expertise, we deliver unmatched value to our growing portfolio of clients from all industries that range from small to large organizations.
We offer all of the following products:
Management Liability:
Board Insurance / Directors and Officers (D&O) Insurance
Employment Practices Liability (EPL) Insurance
Fiduciary Liability Insurance
Other:
Property Insurance- Including Business Interruption & Extra Expense
Machinery Breakdown/Boiler & Machinery Insurance
Course of Construction(COC)
Wrap-up Liability Insurance
Commercial General Liability / CGL Insurance
Pollution Liability Insurance
Commercial Automobile & Fleet Insurance
Umbrella Liability Insurance
Cyber, Hacking & Privacy Liability Insurance
Crime/Fidelity/Employee Theft Insurance
Professional Liability/Errors & Omissions (E&O) Insurance
Kidnap & Ransom Insurance
Representations & Warranty Insurance
Trade Credit
Surety & Bonding
