Theta Ltd owned a widget worth $50 000.It purchased "full coverage" property insurance from Atlantic Insurance Co.It also bought "full coverage" property insurance from Pacific Insurance Co.The widget was destroyed by a fire.Theta Ltd received a $50 000 benefit from Atlantic Insurance Co.Atlantic Insurance Co has now sued Pacific Insurance Co.The best explanation for that action lies in the concept of

Question

Quizplus · Accepted Answer

Contribution is the principle that allows insurers to share the loss when more than one policy covers the same risk. Since both Atlantic and Pacific Insurance Co. provided "full coverage" for the widget, Atlantic Insurance Co. can seek contribution from Pacific Insurance Co. to share the payout.

Theta Ltd Owned a Widget Worth $50 000