What does Failure To Insure Exclusion mean? Read on to discover the definition & meaning of the term Failure To Insure Exclusion - to help you better understand the language used in insurance policies.
Failure To Insure Exclusion
An exclusion found primarily in directors and officers (D&O) liability policies and, to a lesser extent, in public officials liability policies. This exclusion precludes coverage for claims made against insureds when claimants suffer losses resulting from failure to purchase insurance coverage, provided such coverage was available. Many have criticized the rationale for this exclusion because intentional self-insurance even if an organization suffers a significant loss is often a sound business decision, especially in the long term. In recent years, however, underwriters have become more amenable to removing this exclusion, provided insureds submit a summary of the organization's insurance program.
We hope the you have a better understanding of the meaning of Failure To Insure Exclusion.