What does Prior and Pending Litigation Exclusion mean? Read on to discover the definition & meaning of the term Prior and Pending Litigation Exclusion - to help you better understand the language used in insurance policies.
Prior and Pending Litigation Exclusion
An exclusion found in most directors and officers (D&O) liability policies that precludes coverage for claims from litigation that was pending prior to the inception of the policy. For example, assume that litigation was pending against the corporation rather than individual directors prior to the inception of a D&O policy. If the suit was later amended (following inception of a new policy) so that it also named the firm's directors, the prior and pending litigation exclusion would eliminate coverage for the claim against the directors. The intent of the exclusion is to avoid exposure for the "burning building." However, insurers will sometimes agree to remove this exclusion when a policy is renewed.
We hope the you have a better understanding of the meaning of Prior and Pending Litigation Exclusion.