Multiple choice

Sharing of claim between two insurers is known as

  1. dividend

  2. contribution

  3. non-equitable claim

  4. Any of the above
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B Correct answer
Explanation

Sharing of claim between two insurers is known as contribution. The principle holding that two or more insurers each liable for a covered loss should participate in the payment of that loss. Having paid its share of a loss, an insurer may be entitled to equitable contribution, a legal right to recover part of the payment from another insurer whose policy was also applicable.

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