Policy Structure & ProvisionsQuestion 531 of 531
A customer slips in the insured's store and sues him. What the insured presents to his liability insurer is:
a.A third-party claim, defended by the insurer
b.A subrogation claim against the customer
c.An excess claim over the customer's health plan
d.A first-party claim for the insured's own loss
Explanation
A first-party claim is the insured presenting his own loss to his own insurer, such as fire damage to the store itself. When someone outside the contract asserts a claim against the insured, it is a third-party claim, and the liability policy owes both a defense and payment of damages up to the limit. Subrogation runs the other way, against whoever caused the insured's loss.
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