One of the most asked questions is what is an “Innocent Insured Clause”. The purpose of an Innocent Insured Clause is to provide coverage for individuals that are members of the firm for deliberate acts that normally would be excluded from coverage as long as those individuals had no knowledge and/or did not participate in the acts of the individual in the firm that committed those acts. The Wesco Insurance policies Innocent Insured clause is as follows:
“B. Innocent Insured
Whenever coverage under this Policy would be excluded, suspended or lost because of the exclusion relating to dishonest, fraudulent, criminal or malicious act or omission by any person insured hereunder, the Company agrees that such insurance, as would otherwise be afforded under this Policy, shall be applicable with respect to an Insured who did not personally participate in such act or omission and otherwise complies with all terms and conditions of the policy.
The Company’s obligation to pay damages hereunder will be excess of the full extent of the assets of any Insured involved in such dishonest, fraudulent, criminal or malicious act or omission.”
This is a very common clause in almost all professional liability Insurance policies.