A tipping basket permits recovery from the first dollar once the threshold is met, while a true deductible permits recovery only of amounts above it. De minimis provisions further exclude individually small claims.
The distinction substantially affects recovery.
Alternative Names:
Basket|Indemnity Threshold
Why it Matters?
Tipping versus deductible is a material economic difference that parties sometimes treat as a drafting detail, since a one percent basket structured as a deductible eliminates the first one percent of every claim while a tipping basket returns it all once crossed. De minimis thresholds separately exclude small claims from counting toward the basket at all, which compounds the effect. Both provisions are negotiated alongside the cap as a package.
Frequently Confused with
Related terms
Frequently asked questions
What is the difference between a tipping basket and a deductible?
What does a de minimis provision do?
