All Sums Allocation

All Sums Allocation

All Sums Allocation

Under all sums, each triggered policy is liable for the full loss up to its limits, based on language obligating the insurer to pay all sums the insured becomes legally obligated to pay. The policyholder may target a single policy year.

The paying insurer may then pursue contribution from other triggered carriers.

Alternative Names:

Joint and Several Allocation, All Sums Approach

Why it Matters?

All sums shifts the burden of allocation from the policyholder to the insurers, which is its central practical effect. A policyholder facing a long-tail liability can access a single favorable year's limits immediately rather than pursuing dozens of carriers, and uninsured years do not reduce recovery. That makes choice of law a decisive issue in environmental and asbestos coverage litigation.

Frequently asked questions

Can a policyholder choose which policy pays?

Can a policyholder choose which policy pays?

Under all sums, generally yes. The insured may select any triggered policy year, and that insurer must pay up to its limits before seeking contribution.

Do uninsured years reduce recovery under all sums?

Do uninsured years reduce recovery under all sums?

Typically not, which is the principal difference from pro rata allocation where the policyholder absorbs uninsured periods.