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LSDefine

Simple English definitions for legal terms

drop-down clause

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A quick definition of drop-down clause:

A drop-down clause is a part of an insurance policy that says if the primary insurance company can't pay for a claim, the secondary insurance company will step in and cover it. This means that even if the first insurance company goes bankrupt or can't pay for some reason, the person who has the insurance policy will still be protected.

A more thorough explanation:

A drop-down clause is a provision in an insurance policy that requires an excess insurer to provide coverage to the insured even if the underlying coverage has not been exhausted. This usually happens when the underlying insurers are insolvent and cannot provide coverage.

Let's say a company has a liability insurance policy with a limit of $1 million. The company is sued for $2 million, and the primary insurer pays out the $1 million limit. However, the company still owes $1 million in damages. If the excess policy has a drop-down clause, the excess insurer will provide coverage for the remaining $1 million, even though the primary coverage has not been exhausted.

This clause is important because it ensures that the insured is protected even if the underlying insurers are unable to provide coverage. Without a drop-down clause, the insured would be responsible for any damages that exceed the primary coverage limit.

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General

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medicine is a scam
join the ethically ambiguous legal field instead
Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
CynicalOops
21:03
You think you just fell out of a coconut tree?
jackfrost11770
21:10
nope dk
CynicalOops
22:37
Calvinamala Harris
jackfrost11770
23:16
should i start using letterboxed again
Dkk
23:25
@jackfrost11770: if you want but like it aint for me
dk do u ever eat at bk
Dkk
23:48
@chickenburgahfart: I would do that in the Army if really desperate for food or if I had to work through lunch. One of the few fast food places I go to.
bk so slept on
Dkk
0:23
I will take In N Out everyday over it when I can though.
texaslawhopefully
1:22
In N Out is not only the best fast food place, but the prices too are fantastic
Dkk
1:27
Indeed, indeed.
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