Liability coverage limit and severability of insurance


Limit of liability

This condition provides that the liability coverage limit shown in the policy's declarations is the insurer's total limit for damages in any one occurrence, regardless of the number of: insureds, claims made, or persons insured.

This condition further provides that all bodily injury and property damage resulting from one accident or from exposure to the same continuous or repeated conditions will be deemed a single occurrence.

Finally, the limit of liability condition provides that the medical payments limit shown in the declarations is the insurer's maximum liability for medical expense for bodily injury for any one person as the result of any one accident.

Severability of insurance

This condition provides that the liability insurance afforded by the policy applies separately as to each insured, but that this condition will not increase the insurer's limit of liability for any one occurrence.

This condition says that the policy must be interpreted separately for each insured against whom a claim is made or a suit may be brought. For example, two persons qualifying as insureds may be named as defendants in a suit seeking bodily injury damages. The event giving rise to the suit may not constitute an accident as to one insured, whereas it does as to the other insured named as a defendant.

A common example is when one insured is sued for an assault or battery and another insured is sued on a vicarious liability theory for the other insured's alleged assault or battery.

The conduct on which the suit is based may not be an accident as to the insured committing the assault or battery but may prove to be an accident as to the person sued on a vicarious liability theory. The severability of insurance provision mandates that the insurer evaluate coverage separately for each of the insureds who are sued.

There may be conflicts of interest between the two defendant insureds that might require that each be represented by separate defense counsel. In short, this condition means that as to the liability coverage, the availability of liability coverage to an insured and duties owed by and to any insured are independent of the coverage available to and duties owed by and to any other insured.

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