Under Separation of Insureds, how are claims treated?

• A. All insureds share a single limit.
• B. Only the named insured's claims are considered.
• C. Insureds are excluded from coverage together.
• D. Each insured is treated separately for purposes of limits and exclusions.

Answer: (D)

Under Separation of Insureds, each insured is treated separately for purposes of limits and exclusions. This means that when multiple insureds are covered under the same policy, the insurer evaluates coverage for each insured as if the others did not exist. One insured’s claims are subject to that insured’s own limits and the exclusions that apply to that insured, independently of the others. As a result, one insured’s claim won’t automatically deplete another insured’s limit, and exclusions that apply to one insured’s conduct don’t automatically bar coverage for the other insureds. In practice, this ensures that each insured’s claims are handled with their own limits and exclusions in mind.