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A difference in condition clause is a provision of a D&O Liability Insurance Contract, which serves as patch for the gaps in coverage of liability of directors and officers of a company. Normally, a company has contractual or statutory obligations to indemnify for damages incurred by any third party as a result of conduct of its directors or officers, but in some circumstances it may refuse to acknowledge their responsibility for particular actions or just be financially unable to comply with its indemnity obligations. It could also happen that the liability described above is covered by another policy, contracted by the company, but the isurer fails to pay for whaterver reason or the coverage proves insufficient. In that case the company's insurer will be subrogated to payment that would cover such gap, provided that a difference in condition clause, also referred to as DIC is included in the D&O Liability Insurance Contract between the company and the insurer.

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