Prior Knowledge Exclusion

A policy exclusion that denies coverage for claims arising from acts, errors, or circumstances the insured knew about or reasonably should have known about before the policy's inception date but failed to disclose on the application. In law firm malpractice underwriting, carriers ask detailed application questions about potential claims, disciplinary proceedings, and client disputes specifically to invoke this exclusion if undisclosed matters later result in claims. The exclusion protects carriers from adverse selection where a firm purchases coverage after becoming aware of a likely claim. Firms must be thorough and transparent in application disclosures to avoid triggering this exclusion.