most favored venue wording
A provision found within some directors and officers (D&O), professional,
and employment practices liability (EPL) policies stating that with respect
to the insurability of punitive damages, the law of the jurisdiction most favorable
to the insurability of punitive damages will apply, provided the jurisdiction
meets one of the following criteria. It is the jurisdiction where: (a) the punitive
damages were awarded; (b) the act giving rise to the punitive damages award
occurred; (c) the insured is incorporated or maintains its principal place of
business; or (d) the insurer is incorporated or maintains its principal place
of business. When this provision is included within a policy that affirmatively
covers (or does not exclude) punitive damages, it provides assurance that such
damages will be covered by the insurer, despite the fact that covering punitive
damages is contrary to law in certain jurisdictions (e.g., California). Most
favored venue wording merely modifies the existing level of coverage for punitive
damages already provided by a policy. Such wording does not provide coverage
if the policy otherwise excludes punitive damages. It is also important
to recognize that the validity of this provision has not been tested in court.