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Kevin Has Three Liability Policies Which Provide for Contribution by Equal

question 27

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Kevin has three liability policies which provide for contribution by equal shares if other insurance applies to a loss.How much will each policy pay for a $3,000,000 liability judgment if policy A provides $500,000 of coverage,policy B provides $1,000,000 of coverage,and policy C provides $3,000,000 of coverage?


Definitions:

Contribution Margin

The amount by which the sale of a product exceeds its variable costs, contributing to covering fixed costs and generating profit.

Break-Even

The point at which total costs and total revenues are equal, meaning no net loss or gain, and the business is just covering all its expenses.

Fixed Expenses

Costs that remain constant for a given period regardless of the level of production or sales volume.

Break-Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain for the business.

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