Cross Liability a.k.a. Severability Interests

A cross liability clause in a policy ensures that the insurance applies to each insured as though a separate policy were issued to each. The cross liability clause does not
apply to coverage limits, as limits can be different depending on the insured. This clause allows one covered party to sue a second covered party. For example, even though a local government may be added as an additional insured to a general contractor’s liability policy, the contractor would still have coverage if you sued because the contractor’s work was faulty or the project was not completed. We recommend that you
require a cross liability clause in every contractor’s/consultant’s insurance policies.