Question

show work please

DeAngelo purchased a general liability policy from Alpha Insurance with a $1 M (11lion) per-occurrence limit and a $10 million annual aggregate limit. It has a secona GL policy from Omega insurance with a $3 M per-occurrence limit and a $10 M annual aggregate limit. collapse at the DeAngelo home office, A court ruled DeAngelo must pay $750,000 in damages to the injured party. A DeAngelo customer was severely injured by a ceiling 1. What is each insurer'a liability if the claim is settled on a pro rata basin using the per-occurrence limits? Clearly label how much each insurer will pay (1.5 points) 2. What is each insurer's liability if the claim is settled on a primary and excess basis with Omega deemed primary and Alpha deemed excess? (1 point)

Answer 1

b-1). Ratio of per-occurence claim = 1:3 ($1mn from Alpha and $3mn from Omega)

Liability = 750,000

On a pro-rata basis,

Alpha will pay 750,000*(1/4) = 187,500

Omega will pay 750,000*(3/4) = 562,500

b-2). If Omega is primary then it has a per-occurence limit of $3mn, so it will settle the entire claim of 750,000 as the liability amount is less than its per-occurence limit. Alpha will not pay anything.