Common use of Mitigation Costs Clause in Contracts

Mitigation Costs. The Insurer will indemnify an Insured Person for any reasonable and necessary payments to a potential claimant, or an Insured Person’s reasonable and necessary costs and expenses incurred as a result of action taken by the Insured Person solely to prevent or mitigate a potential Claim against an Insured Person which, if it were to become a Claim, would give rise to a covered loss under this D&O Coverage Section, provided that: (i) the circumstances resulting in the payment, costs or expenses are reported in accordance with Section 3.1 (Notice and Reporting) of the General Terms and Conditions of this Policy; and (ii) any action taken is taken with the prior written consent of the Insurer; and (iii) The Insured Person demonstrates, to the reasonable satisfaction of the Insurer, that the incurring of such payments, costs or expenses is reasonable and proportionate, and is reasonably likely to prevent or mitigate the potential Claim; and (iv) the liability of the Insurer under this Section 2.1 (Mitigation Costs) shall in no event exceed the amount of covered Loss it would have incurred if a Claim were to be pursued against the Insured Person; and (v) the burden of proving that any Claim would be covered under this D&O Coverage Section shall rest with the Cover under this Section 2.1 (Mitigation Costs) shall be subject to the Sub-Limit specified in Item 5 of the Schedule. This Section 2.1 (Mitigation Costs) shall not apply to a potential Claim by the Company against any Insured Person. In no event shall cover under this Section 2.1 (Mitigation Costs) include the remuneration of any Insured Person, costs of their time or any other costs or overheads of any Company.