multiple trigger insurance contracts
Traditional insurance contracts have one trigger: a physical event or occurrence
that activates coverage. Multiple trigger contracts are designed to respond
to both physical hazard-type events and resultant financial movements. These
financial movements can be any benchmark against which the firm measures its
financial viabilities, such as its stock price, quarterly earnings, internal
rate of return, etc. For example, a multiple trigger (also known as a dual trigger)
program could cover property loss due to fire, windstorm, etc., and a reduction
in quarterly earnings that results from the physical event.