What does Major Shareholder Exclusion mean? Read on to discover the definition & meaning of the term Major Shareholder Exclusion - to help you better understand the language used in insurance policies.
Major Shareholder Exclusion
An exclusion contained in some directors and officers (D&O) liability policies that precludes coverage for claims made by individuals who own a large percentage of the insured entity's stock (typically more than 5 percent to 10 percent). The rationale for the exclusion is that such claims are often the result of infighting or personality conflicts between major shareholders and management rather than being caused by managerial errors involving substantive business decisions.
We hope the you have a better understanding of the meaning of Major Shareholder Exclusion.