Calculation of indemnities when syndicate has insufficient insurance
The syndicate suffers $70,000 damage.
The coverage for this loss is limited to $40,000, resulting in an insurance insufficiency of $30,000.
The syndicate can apportion the $30,000 among the ten co-owners.
Each co-owner receives a $3,000 apportionment representing his/her share of the $30,000 ($30,000 x 10% = $3,000).
The insurer does the following calculation:
Co-owner’s apportionment : $3,000
The portion of the syndicate’s deductible ($10,000 X 10%):$1,000
Total payable by
the insurer : $1,500
The co-owner must pay $1,500.
The syndicate can claim the responsible co-owner for the $30,000.
The insurer of the responsible co-owner indemnifies for Civil Liability Coverage.