Insurance Law Monthly
Professional indemnity insurance: exclusions for potential collusive claims
Professional indemnity policies, including directors' and officers' policies, that offer cover on a composite basis to two or more persons, frequently exclude "insured v insured" claims. The purpose of that exclusion is to prevent collusion between the insured persons. There is little authority on the meaning of this exclusion.
Malamit Pty Ltd v WFI Insurance Ltd
[2017] NSWCA 162, a decision of the New South Wales Court of Appeal, provides some guidance on the matter.