Does the Insolvency clause contradict the Estates and Legal Representatives clause?

  • The Insolvency clause excludes claims arising out of the Insured’s Insolvency. 
  • The Estates and Legal Representatives clause (amongst other things) covers claims made against the legal representative of an insolvent Insured. 
  • Is there any benefit in covering the claims made against the legal representative of an insolvent Insured if policy contains the Insolvency clause?
    • Yes, because the legal representative could be held liable for mismanagement claims which are unrelated to Insolvency.
    • Example: the insolvent Insured’s legal practitioner failed to renew a trading licence on time. As a result the value of the Insured’s estate was further eroded and benefit payable to creditors was even smaller. The creditors sued the legal practitioner for that drop in benefit.
 
Subject: 
Directors and Officers Liability