What type of insurance provides identical coverage on a risk?

Concurrent insurance refers to multiple insurance policies that provide identical coverage on the same risk. This situation arises when an insured party purchases two or more policies that cover the same subject matter and provide the same terms and features. In essence, these policies will work together to ensure that the same types of losses are covered without any gaps or overlaps in coverage.

For example, if a business has two concurrent insurance policies both covering property damage for the same building, if a loss occurs, both policies will cover the claim equally. This can be beneficial in providing certainty and stability for the insured, as there is no confusion or variance in the coverage provided by each policy, and it helps ensure that the insured will be adequately covered in the event of a claim.

Understanding the concept of concurrent insurance is essential for proper risk management, as it helps to streamline the claims process and simplify policy management, avoiding complications that could arise with differing coverage terms in nonconcurrent insurance situations.