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Simple English definitions for legal terms
knowledge-of-falsity exclusion
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A quick definition of knowledge-of-falsity exclusion:
The knowledge-of-falsity exclusion is a rule that says insurance companies don't have to pay for damages caused by lies. If someone says something they know is false and it causes harm, the insurance won't cover it. This is like if you told a friend a lie that made them get hurt, and your mom said she wouldn't buy you a new toy to make up for it. It's important to always tell the truth so that everyone stays safe and happy.A more thorough explanation:
Definition: A provision in some commercial general liability policies that excludes coverage for damages arising from an oral or written communication made by the insured with knowledge that it is false.
Example: A company publishes an advertisement claiming that their product can cure cancer. They know that this claim is false, but they still publish it. If someone sues the company for false advertising, their insurance policy may have a knowledge-of-falsity exclusion, which means that the insurance company will not cover the damages.
This example illustrates how the knowledge-of-falsity exclusion works. If the insured knowingly makes a false statement, they cannot rely on their insurance policy to cover any damages resulting from that statement.