Which indemnity limit applies when a claims falls across different sections and extensions of the policy?

  • If a claim falls across more than one section or extension of the policy then the total claim amount is limited to the section/extension with the highest limit
  • This means that the indemnity limits of the different sections and extensions are not added together to reach a final limit of indemnity.
  • The policy does not allow inadequately insured sections/extensions of the policy to be subsidised by other sections or extensions of the policy.
  • For example: Suppose a policy’s limit of indemnity is R1m for Section A – Public Liability and R10,000 for Statutory Defence Costs.
    • Suppose the quantum of the claim was R2m for Section A, and R20,000 for Legal Defence Costs. The policy would pay a maximum of R1m towards the claim.
    • Suppose the quantum of the claim was R900,000 for Section A and R20,000 for Legal Defence Costs. The policy would pay a total of R910,000 made up of R900,000 for the Section A part of the claim and subject to the R10,000 limit for the Legal defence Costs part of the claim.
Subject: 
General Liability