subject: Insurance Contribution - Same Form Of Cover [print this page] Insurance Contribution - Same Form Of Cover
The peril or contingency causing the loss must be covered by all the policies in question. One would therefore think that any overlap between the policies would be sufficient to enable the insurers to insist upon their rights of contribution, provided that the insured can make a claim under any of the policies in question. In practice, the English courts have not accepted this logical proposition and take the view that any temporary or coincidental partial overlap of these policies does not necessarily constitute double insurance for the purposes of contribution (Australian Agricultural Co. v. Saunders (1875) LR 10 CB 668). The coverage in each policy must be substantially similar before any rights of contribution can exist.
This might be, as a matter of logic, kind of difficult to accept. The purpose of the equitable principle of contribution is to ensure that all insurers whose policies cover the loss in question contribute towards a fair spread of the loss between all insurers who could be asked to indemnify the insured. You might ask yourself why should the fact that it was unintended have any significance? You might ask yourself if it is also, presumably, a question of degree: just how temporary is temporary? Or you might ask yourself if is the subjective intention of the insured relevant?
It is almost common knowledge these days that the degree of similarity is also important. If the coverage is identical, it is termed "concurrent". If similar but providing more or less coverage, it is termed "non-concurrent".
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