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insolvency clause

An insolvency clause is a clause holding a reinsurer liable for its share of loss assumed under a treaty, even though the primary company has become insolvent.

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insolvency clause

An insolvency clause is a clause holding a reinsurer liable for its share of loss assumed under a treaty, even though the primary company has become insolvent.

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This term also refers to a clause in an umbrella liability policy, stipulating that the umbrella will not drop down in the event the primary liability insurer is unable to pay because of insolvency.