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Glossary
The contract

Wilful misconduct

Intentional act aimed at causing damage or deceiving the insurer. It is always excluded from cover.

In practice

It is uninsurable by definition, but the boundary with gross negligence is fine and the burden of proof lies with the insurer. In D&O, defence costs are usually advanced until a final judgment declares the wilful misconduct, and only then are they claimed back.

Where it is addressed

This term is covered in Gobierno corporativo.

Related terms

Gross negligenceNeglect of basic diligence, without intent to cause damage. Unlike wilful misconduct, its cover can be agreed upon.Good faithPrinciple that obliges both parties to inform each other with loyalty: the policyholder about the real risk and the insurer about the scope of what is offered.Directors and Officers (D&O)Insurance that protects the personal assets of directors and officers against claims for their management decisions.AccidentEvent of violent, sudden, external cause beyond the insured's will that causes bodily or material damage.Direct action of the injured partyRight of the person who has suffered damage to claim compensation directly from the insurer of the responsible party, without going through them.Aggravation of riskChange in declared circumstances that increases the probability or intensity of the claim. The policyholder must communicate it as soon as possible.
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