when two insurers are liable under a given common policy, the principle of insurance that applies is?
Answer Details
When two or more insurers are liable under a common insurance policy, the principle that applies is the principle of contribution. This principle ensures that each insurer contributes proportionately to the loss or claim, based on the amount of premium they have received. In other words, each insurer will pay their fair share of the claim, which is determined based on the limit of liability in the policy and the amount of premium they have received. The principle of contribution is important in ensuring that the policyholder is not over-compensated for the loss or claim and that insurers are not over-burdened with the cost of the claim.