Home > Glossary

Nonrescission Provision

Nonrescission Provision


Nonrescission Provision — a provision sometimes included within liability policies stating that the insurer cannot rescind the policy for any reason. Such provisions are often contained within Side A directors and officers (D&O) liability policies and, less frequently, in D&O policies written to cover privately held and nonprofit corporations. (Side A policies are those covering only the personal liability of the directors and officers rather than the liability of the corporation to indemnify them for their acts.) If an insurer rescinds a policy, it is treated as though the policy never existed, and the insurer must refund the full premium to the insured. Therefore, nonrescission provisions are advantageous for insureds.

Related Terms

Related Products

User ID: Subscriber Status:Free