Inadequate consideration exclusion

{
  "id": "MLC-T-INS-001779",
  "term": "Inadequate consideration exclusion",
  "field": "Insurance and risk management",
  "definition": "A provision in a directors and officers (D&O) liability insurance policy that denies coverage for claims alleging that the insured directors or officers approved a transaction for insufficient value. This exclusion typically applies to claims arising from mergers, acquisitions, or other corporate transactions where shareholders contend that the consideration received was inadequate. It aims to prevent D&O policies from covering business judgments related to valuation disputes.",
  "subject": "Management Liability",
  "url": "https://mlchart.com/terminology/insurance/inadequate-consideration-exclusion/"
}