LIABILITY INSURANCE: DON'T LET 'SEVERABILITY OF INTERESTS' MAKE YOU CROSS

2Let's say a general contractor or owner/developer asks you for a "cross liability" endorsement, but you can't find this provision in the policy itself or as an endorsement. Should you be worried?

Probably not. Standard Liability coverage includes a cross-liability provision known as a "Separation of Insureds" agreement, with language that reads something like this: "Every insured claimed against under this policy will be treated, at the time of the claim, as if they were the only insured under the policy." This clause essentially allows one party that the policy covers (for example, the general contractor) to sue a second party covered in the same policy (you). In this case, the GC is asking to be added to your Liability coverage - while reserving the right to sue you.

If the GC sues you, under the cross-liability provision you'll be treated as if you're the only insured under your policy: The insured status of the party suing you is irrelevant.

The Cross Liability endorsement provides an excellent example of the extensive coverage that makes your Liability policy such a valuable resource for protecting the financial assets of your business.

If you have any questions about your coverage, please feel free to get in touch with us.

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