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Can the Innocent Survive Rescission? The Innocent-Insured Exception to the Wrongful-Acts Exclusion

Professional liability policies typically exclude coverage for claims arising out of an insured's knowing, wrongful acts, but, in recognition of the fact that a single policy may extend coverage to multiple insureds working together in association, insurance companies sell the policies with language reinstating coverage for innocent insureds, those of the insureds who had no knowledge of the allegedly wrongful acts of their colleagues. Recently, this innocent-insured coverage has received scrutiny.

27 minute read April 01, 2003 at 11:16 AM
By
Donald R. McMinn
Can the Innocent Survive Rescission? The Innocent-Insured Exception to the Wrongful-Acts Exclusion

Professional liability policies typically exclude coverage for claims arising out of an insured's knowing, wrongful acts, but, in recognition of the fact that a single policy may extend coverage to multiple insureds working together in association, insurance companies sell the policies with language reinstating coverage for innocent insureds, those of the insureds who had no knowledge of the allegedly wrongful acts of their colleagues.

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