As an expert in the field of insurance, I can provide you with a comprehensive understanding of the term "contribution" within the context of insurance coverage.
In insurance, the term "contribution" refers to the principle that when two or more insurers are liable for the same loss under different insurance policies, they should share the financial burden of the loss. This principle is based on the idea of fairness and equity among the insurers involved in the coverage of the loss.
The concept of contribution is particularly relevant in situations where there are multiple insurance policies that provide coverage for the same loss. For example, if a property owner has two separate insurance policies, one for fire damage and another for general liability, and a fire occurs that causes both property damage and personal injury, both insurance policies may be triggered to provide coverage for the loss.
Under the principle of contribution, each insurer is responsible for paying its share of the total loss, based on the terms and conditions of their respective policies. The insurer's share of the loss is typically determined by the proportion of the total insurance coverage provided by each policy. For instance, if the total loss is $1 million and one insurer has a policy that provides $500,000 of coverage, while the other insurer has a policy that provides $500,000 of coverage, each insurer would be responsible for paying $500,000 towards the loss.
Once an insurer has paid its share of the loss, it may be entitled to seek contribution from the other insurer(s) involved. This is known as "equitable contribution." Equitable contribution is a legal right that allows an insurer to recover a portion of the payment it has made from another insurer whose policy was also applicable to the loss. The purpose of equitable contribution is to ensure that each insurer bears its fair share of the loss, rather than one insurer bearing a disproportionate amount of the financial burden.
It is important to note that the right to equitable contribution is subject to certain conditions and limitations. For example, an insurer may not be entitled to contribution if it has unreasonably delayed in paying its share of the loss or if it has acted in bad faith. Additionally, the right to contribution may be limited by the terms of the insurance policies involved or by applicable laws and regulations.
In summary, the principle of contribution in insurance is a fundamental concept that ensures fairness and equity among insurers when multiple policies provide coverage for the same loss. It requires each insurer to pay its share of the loss and provides a mechanism for insurers to seek equitable contribution from one another when necessary.

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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.read more >>