Section 9.36 Insured vs. Insured Exclusion

• Library: Insurance Practice 2015

The exclusion commonly known as the “insured vs. insured” exclusion precludes coverage for losses resulting when one insured sues another. This most commonly occurs when a corporation sues its own insured directors and officers. Shareholder derivative suits brought against individual insureds on behalf of the corporation are often specifically exempted from this exclusion. See Finci v. Am. Cas. Co. of Reading, Pa., 593 A.2d 1069, 1082 (Md. 1991). An exclusion did apply when a shareholder derivative suit was brought by a former director of a corporation, even though the former director was not involved in wrongdoing and was not with the corporation at the time of the suit. Sphinx Int’l,...