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Severability of Interests Clause

What is an Severability of Interests Clause?

The Severability of Interests Clause is a provision in an insurance contract that may refer to the fact that the interests of two or more parties in a contract are severable, meaning that each may be treated as if it were an independent contract. This clause is typically used when two or more entities are attempting to insure the same property. The Severability of Interests Clause allows for the interests of each party to be taken into account and separated out.

Severability of Interests Clause in More Detail

The Severability of Interests Clause states that, in the event of a claim, the insurer will assess the damages to each party separately. This means that if one party is responsible for a claim, the other party’s interests may not be affected. For example, if a property is insured jointly by two parties, and one party is found to be responsible for the damage, the other party’s interests in the property may remain intact.

The Severability of Interests Clause also provides an additional layer of protection for the insurer. By separating out the interests of each party, the insurer is able to determine the extent of their liability, and the amount they may need to pay out in the event of a claim.

In conclusion, the Severability of Interests Clause is a provision in an insurance contract that may refer to the fact that the interests of two or more parties in a contract are severable. This clause provides an additional layer of protection for the insurer, by allowing them to determine the extent of their liability in the event of a claim.

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