This type of exclusion clause is commonly referred to as an "insured v. insured" exclusion. The underlying reason for such a [page393] so-called exclusion clause is to prevent abusive actions instigated with collusion between insureds, such as, for example, where a company may have suffered a loss by virtue of a business decision due to an error in judgment of the directors who might then cause the company to sue themselves with a view to indemnity from the insurer.
"The most advanced legal research software ever built."
The above passage should not be considered legal advice. Reliable answers to complex legal questions require comprehensive research memos. To learn more visit www.alexi.com.