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Pre Set Allocation Provision

Pre-Set Allocation Provision

Definition

A provision found in directors and officers (D&O) liability policy forms indicating the specific percentage of each claim that will be "allocated to" (i.e., paid by) the insured and the insurer, respectively. Pre-set allocation provisions apply only to section C, entity securities coverage, of D&O policies. Most often, these percentages are either 70/30 or 60/40 (insurer/insured).

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