Clash cover
A liability treaty responding when one event brings several of the cedant's policies into play.
Textbook case: a structural collapse hits four insureds of the same cedant, with losses of 1.1 to 2.8 million euros, each below the 3 million retention; the clash cover aggregates the 7.7 million and pays 4.7 million. A clash cover protects a cedant against liability accumulation. It responds when one event triggers several distinct policies in the same book at once. No per risk cover sees this situation, since each policy, taken alone, stays below the retention. The classic case is an accident where the insurer covers the carrier, the maker of the failed component and the project owner alike, and ends up paying three times for one originating fact. The problem it solves is invisible accumulation. Geographic concentration shows on a map; liability accumulation hides in the contractual relationships between insureds, which nothing in the cedant's systems connects. A clash cover generally requires at least two policies to be affected. Pricing it stays difficult for want of history, these events being rare. It has become a central concern on cyber risks and on exposures to synthetic substances.
A structural collapse in 2026 implicates four insureds of the same cedant: the project owner, the inspection bureau, the main contractor and the maker of an anchor bolt. None of the four policies, with losses from 1.1 to 2.8 million euros, reaches the 3 million retention. The clash cover, which aggregates all four, pays 4.7 million above its own 3 million retention on the 7.7 million accumulation.
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