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When multiple insureds obtain an insurance policy, usually on jointly owned property, and one insured causes a loss through wrongdoing, the other insureds are considered “innocent co-insureds.”

Reinsurance is the process by which an insurance company shares the risk that it assumes when it issues an insurance policy. For example, an insurance company that issues a $1 million life insurance policy may reinsure or have other insurers assume $900,000 of the risk. The insurance company issuing the policy thus “cedes” most of the risk to one or more reinsurers.