Cross-Liability Coverage
Categories: Insurance
A small business might decide to take out one insurance policy that will cover all the co-owners. But what happens when one co-owner embezzles some money and is sued by the other co-owner?
Fortunately, standard commercial insurance policies allow cross-liability coverage under a “separation of insureds” agreement, which states that every insured party under the policy will be treated as if they had their own separate policy. Therefore, one party is allowed to sue the other. But unfortunately, they need to stay within the original coverage amount.