Cross-Liability Coverage is a commercial insurance contract that covers insurance contracts for multiple parties. Cross-liability Coverage is an insurance program that provides coverage for both parties if one has a claim against the other.
Well, this article will provide more information on what you need to know about this insurance policy.
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Cross-Liability Coverage are standard commercial liability policies that allow one insured party to sue another insured party while both parties are under the same policy.
However, the Cross-Liability policy does apply in certain situations where one company director sues another company director, like the purchase of lawsuits by a company against its directors.
Cross-Liability Coverage insurance treats the two separate insured parties that are covered under the same insurance contract as if their policies are separate. With the insurance policy, one party is given the right to lay an insurance claim under the same policy.
Understanding Cross-Liability Coverage
Cross-Liability Coverage solely concerns the suing of one insured party against the other insured party for some damages under the same policy. Furthermore, standard liability insurance includes a cross-liability clause referred to as the “Separation of Insured” agreement.
Insurance policies which involve Cross-Liability Coverage usually consist of a phrasing that inscribes “Every insured claimed under this policy will be treated, at the time of the claim, as if they were the only insured under the policy”
However, commercial insurance contracts consist of cross-liability coverage. In this clause, the parties in the contract are treated separately in some situations and treated the same in others. Also, in a situation where the parties are separately treated in a claim suit process, their coverage limit is not offered separately.
Cross-Liability coverage is known to cover liability claims of one entity against the other which are insured under one policy. Well, cross liability coverage is provided commonly by insurance policies which insured individuals or multiple bodies and aids reduction of disadvantages whereby the insurance of multiple entities under one policy as opposed to taking out separate policies for each entity.
Cross-liability coverage is usually involved with business insurance and is mainly found on policies which are involved in the insuring of multiple companies under one single policy.
Cross-liability coverage in private insurance offers car liability rider insurance in which claims of liability between insured Individuals under the same policy are excluded from coverage normally.
Example of Cross-Liability Coverage
Cross-Liability Coverage in essence is a policy that separately applies to two insured parties as if their insurance policies are independent of one another. However, this article will be giving you more enlightenment about the insurance program through examples for better understanding. Just continue reading further through this article.
For instance, suppose a restaurant chain has gained a partnership with a company that makes supplies with condiments for the restaurant and legal complaints are filed for food poisoning against the restaurant. Where investigation was carried out and revealed that the condiments supplied is responsible for the food poisoning.
Furthermore, if the two entities are insured under the same insurance, and the policy consists of cross-liability, the restaurant chain is still entitled to file a complaint against the supplier and under the same policy, the supplier still has access to protection.
Meanwhile, both parties will be treated as if they are under separate policies even though are insured under the same policy, just for the purpose of the claim.
The instance given above is an example of cross-liability coverage for better understanding and there are also more examples which apply to the liability coverage.
This also applies to families too and other institutions and companies where they are treated as if they are under separate policies but under one insurance policy.
Frequently Asked Questions
This section of the article throws more enlightenment about some frequent questions that are been asked about Cross-liability Coverage.
What is Covered Under General Liability Insurance?
General liability policies cover you and your company or institution for claims involving injuries and property damage resulting from your services or operations.
What Are the Three Types of Liability Insurance?
The three main insurance coverage consists of General Liability, Professional Liability and Employer liability.
What Does Severability of Interest Mean?
Severability of interest is a clause which states that the policy’s coverage is to apply separately to each insured against whom a claim is made.