spousal coverage

Spousal coverage is a provision in directors and officers (D&O) liability policies extending coverage to an insured's spouse.

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Although sometimes contained within regular policy provisions, most insurers will provide such coverage by endorsement, often for no additional premium. Spousal coverage is needed because when they are named in lawsuits, directors and officers sometimes shield assets by transferring them to spouses. Recognizing this tactic, in recent years, plaintiffs' attorneys have begun naming spouses in suit papers. Spousal coverage provisions do not cover an insured director's or officer's spouse for a wrongful act. Rather, they only cover that spouse's interest in property against which a claim is made.