"The insurer shall not be liable for the payment of any financial damage in connection with and/or as a result of any claim: arising from, caused or contributed by any actual act or omission of dishonesty or fraud or deliberate act or omission, performed by any officer or carried out on his instructions or with his approval or knowledge while using fraud, dishonesty, malice or indifference to the results of the act and/or omission."
In view of the trial court's determination that Pinkowitz's actions amounted to a breach of trust, it was determined that the insurance claim should be dismissed with respect to damages arising from Pinkowitz's actions.
- In addition, and since the claim against the directors was dismissed, it was determined that the claim against the insurer should be dismissed in any case for damages that were alleged to have been caused due to the negligence attributed to these directors in the statement of claim.
The trial court added that even if it had determined that liability should be imposed on any of the directors (in addition to Pinkowitz), the claim against the insurance company would have been dismissed, in light of what is stated in clause 4.14 of the policy, which stipulates that the insurer will not be liable "for the payment of any financial damage in connection with and/or as a result of any claim filed or conducted at the initiative or at the direction of the company or any officer".
The court also rejected the plaintiffs' argument that their claim falls within the scope of the exception set forth in section 4.14.3, which qualifies the aforesaid and states that the insurance company will nevertheless be liable for the payment of financial damages when the claim is filed by a "liquidator, receiver or authorized manager appointed by a competent authority". It was held that contrary to the plaintiffs' claim, CPA Darman, on whose behalf the lawsuit was also filed, is not an "authorized manager" but was appointed as an "operating manager", and this is sufficient to determine that he does not meet the definition set out in the policy.