Which of the Following Would Strongly Support Rescission of Coverage

question 40

Multiple Choice

Which of the following would strongly support rescission of coverage for D&O liability insurance?

• A) inclusion of a well-drafted severability clause
• B) any misrepresentation made in the policy application
• C) lack of a non-cancellation clause
• D) imposition of liabilities imposed on the directors and officers

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Definitions:

Pro Forma Earnings

Financial results excluding one-time events to give investors an idea of a company's normal earnings potential.

Basic EPS

Basic Earnings Per Share, a calculation that shows how much earnings are available to common stockholders, on a per-share basis.

Sustainable Earnings

Earnings resulting from the core operations of a company, expected to continue into the future without significant variation.

Equity Change

Refers to the movement in a company’s equity value over a period of time due to factors like earnings, share buybacks, and dividends.