What is the effect of a Severability clause on coverage for multiple insureds?

• A. It extends coverage to all insureds as a single entity
• B. It excludes any insured for a prior claim
• C. It creates joint liability
• D. It treats each insured's acts and coverage separately

Answer: (D)

Severability of insureds means each named insured is treated as if covered by a separate policy. This ensures that one insured’s acts, omissions, or claims don’t affect the coverage available to the others, and that each person’s coverage is considered on its own terms within the policy limits. In practice, this keeps the defense and liability decision for one insured from being tied to another’s conduct, and it prevents joint liability from automatically attaching to all insureds because of a single act. The result is that coverage is allocated on an insured-by-insured basis rather than as a single lump for all named insureds.