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Contribution

Contribution

Definition

The principle holding that two or more insurers each liable for a covered loss should participate in the payment of that loss. Having paid its share of a loss, an insurer may be entitled to equitable contribution—a legal right to recover part of the payment from another insurer whose policy was also applicable. Many insurance policies stipulate the formula under which contribution among multiple insurers will take place. Two standard methods are Contribution by limits and Contribution by equal shares.

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