Equal Shares Clause Law and Legal Definition
Equal shares clause is a clause under insurance law requiring an insurer to pay its proportionate share of a claimed loss. The insurance law provides for an insurer to make contribution by equal shares. Under equal shares clause, an insurance company is not under a liability to contribute greater proportion of a loss than is payable. Each insurer should contribute an equal share until the share of each insurer equals the lowest applicable limit of liability.
With respect to any amount of loss not so paid, the insurers can continue to contribute equal shares of the remaining amount of the loss until each such insurer has paid its limit in full or the full amount of the loss is paid. [Georgia Casualty & Surety Co. v. Universal Underwriters Ins. Co., 534 F.2d 1108 (5th Cir. Ala. 1976)]