What is meant by Cross Liabilities in a liability policy?

  • If one entity covered by this policy sues another entity covered by this policy, then the policy will treat each party as though they were insured separately. In other words, the policy will not reject the claim because the Insured is suing itself.
  • The indemnity limit is not increased by this provision. In other words, if the indemnity limit is R1m and two parties covered by this policy are suing each other, then the limit does not increase to R2m, but stays at R1m.
  • The Cross Liabilities provision does not apply to the Errors and Omissions extension and the Pure Economic Loss extension.
  • Example 1: Whilst participating in the Insured’s sports club, one member negligently injures another. Even though the plaintiff and the defendant are both covered under the same policy, the policy will indemnify these people as if they had separate policies.
  • Example 2: The Insured may consist of a parent and several subsidiary companies. If one subsidiary were to sue another, the policy would treat each subsidiary as though it was insured separately.
  • Most Multimark policies state that each of the insured persons must be stated on the policy schedule. The Camargue policy does not impose this (potentially confusing) limitation. In the sports club example, the participants would not normally be named on the policy schedule.
General Liability