Question

Acme Manufacturing Company is insured under two primary Commercial General Liability (CGL) policies. Policy A has an each-occurrence limit of $1,000,000 and Policy B has an each-occurrence limit of $2,000,000. Acme submitted a claim for $2,400,000 arising from a single occurrence for an incident that is covered by both policies. How much of the claim is payable under Policy B if the loss payment is based upon contribution by equal shares?

Answer 1

B) $1,400,000

Step-by-step explanation:

Policy A will cover $1,000,000 and policy B will cover $1,400,000

When a single insured company has two or more policies from different insurance companies, the contribution by equal shares provision establishes that the losses must be divided equally between the insurance companies until the full amount is paid.