Cross Liability Clause – Explain with Simple Terms and Example

“Cross Liability Clause: It is hereby agreed and understood that if any claim or suit is brought against any insured party named in this policy, the coverage provided shall apply separately to each insured party as if a separate policy had been issued to each, and the insurer shall not deny coverage to any insured party based on the actions or negligence of any other insured party. The insurer shall be liable for its proportionate share of the total liability arising out of the claim or suit, up to the policy limits, without regard to the liability of any other insured party.”

In simple terms, this clause ensures that each insured party is treated as if they have their own individual policy, and the insurer cannot deny coverage to one insured party based on the actions of another insured party. It also states that the insurer’s liability will be limited to their proportionate share of the total liability, regardless of the liability of other insured parties. This clause provides protection and coverage to all parties involved in the policy.