What is the function of cross-liability insurance?

Cross-liability insurance is designed specifically to cover situations where one insured party may make a claim against another insured party under the same insurance policy. This type of coverage is particularly relevant in scenarios where multiple parties are insured under a single policy, such as in joint ventures or partnerships. It allows each party to claim against the policy without limitations that might otherwise arise from their shared status under the same policy.

This function is crucial in business environments where liability issues can arise between insured parties. By providing this coverage, cross-liability insurance ensures that the rights and responsibilities of each insured entity are maintained, promoting equity and comprehensive protection within a policy framework.

In contrast, the other options relate to different aspects of insurance coverage: one focuses on employee claims, another on protecting property and equipment, and the last one addresses natural disaster risks. None of these options encapsulate the unique function of cross-liability insurance in the context of multiple insured parties claiming against each other.