Legal Definitions - named-insured exclusion

A named-insured exclusion is a specific provision within an insurance policy that denies coverage for certain types of claims or losses when they involve the individual or entity explicitly listed as the policyholder (the "named insured"). Essentially, while the policy generally provides protection for the named insured, this exclusion carves out particular circumstances where that protection does not apply, often related to the named insured's own intentional actions or specific types of claims brought by or against them.

Here are some examples to illustrate this concept:

• Example 1: Homeowner's Insurance and Intentional Damage

  Imagine Sarah is the named insured on her homeowner's insurance policy. After a heated argument, she intentionally smashes a valuable antique vase in her own home. When she files a claim to replace the vase, her insurance company denies it. This is because most homeowner's policies include a named-insured exclusion for damage caused by the policyholder's own intentional acts. The policy is designed to cover accidental losses, not deliberate destruction by the person it insures.

• Example 2: Auto Insurance and Intentional Harm

  David is the named insured on his car insurance policy. In a fit of road rage, David intentionally swerves his car into another vehicle, causing significant damage and injury to the other driver. When the other driver sues David for damages, David's auto insurance policy will likely refuse to cover his legal defense or any resulting settlement. This is due to a named-insured exclusion that typically prevents coverage for injuries or damages caused by the named insured's deliberate and malicious actions, as insurance is intended for accidental occurrences.

• Example 3: Business Liability Policy and Owner's Fraud

  A small business, "InnovateTech Inc.," is the named insured on a general liability policy. The owner and CEO, Mr. Chen, intentionally misleads investors about the company's financial health, leading to a lawsuit against InnovateTech Inc. for fraud. The company's liability policy would likely contain a named-insured exclusion for claims arising from the intentional fraudulent or deceptive acts of the named insured (InnovateTech Inc. through its owner). Consequently, the policy would not cover the legal costs or damages associated with Mr. Chen's deliberate misconduct, as the exclusion specifically targets the named insured's intentional wrongful acts.