Insurance
Mar. 8, 2019
‘Best efforts’ and allocation provisions in D&O policies
Many, if not most, directors and officers liability policies contain allocation clauses. Commonly, these clauses provide that when an insured is sued for a covered loss with someone who is not covered for the claim, or the insured is sued for both covered and uncovered loss, the insureds and the insurer agree to use their “best efforts to determine a fair and proper allocation of covered Loss.”
Many, if not most, directors and officers liability policies contain allocation clauses. Commonly, these clauses provide that when an insured is sued for a covered loss with someone who is not covered for the claim, or the insured is sued for both covered and uncovered loss, the insureds and the insurer agree to use their "best efforts to determine a fair and proper allocation of covered Loss." In addition, these provisions commonly provide that "the parties shall tak...
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