Stewart Smith partner Marc Kamin recently published an article in PropertyCasualty360 and The Insurance Coverage Law Center, titled, “The ‘any insured’ exclusion: When an insurer is still exposed,” that addresses the uncertainty that general severability (or non-imputation) clauses can cause with respect to professional liability and directors’ and officers’ insurance policies.
Marc warns that to avoid uncertainty, insurers and underwriters should be wary of these clauses, which have the potential to strip any meaning from an exclusion that would otherwise serve to exclude coverage for all insureds. Marc suggests if a severability clause must exist, it should reference a specific provision or condition of the policy and one that is not expressly in conflict with the severability provision itself. Exclusions applying to “any insured” unambiguously exclude coverage for all, including innocent insureds. Therefore, the majority of courts generally uphold that interpretation even in the face of a severability provision found elsewhere in the policy.
Read the full article for Marc’s assessment on what could happen when the policy contains a general severability clause, or the clause is found within the exclusion itself.
Read the article.