What does the Severability of Interests condition in an insurance policy state?

The Severability of Interests condition in an insurance policy articulates the principle that each insured party is treated independently when coverage is applied, as if each one were the sole insured under the policy. This means that the actions or violations of one insured do not affect the coverage available to other insured parties.

When a policy includes this condition, it ensures fairness among multiple insureds by allowing them individual coverage, which can be particularly important in situations where one insured’s actions might lead to a loss or claim that could potentially jeopardize the coverage for others under the same policy. This condition is key in multi-insured contexts, as it reassures different parties that they are protected regardless of the actions of their co-insureds.

The other options reflect scenarios not aligned with the intent or application of the Severability of Interests condition. For instance, limiting coverage to just the first named insured disregards the independence among insureds. Specifying a coverage limit per insured could be a separate policy feature, but it doesn't relate to the principle of severability. Suggesting that coverage is void if one insured violates terms undermines the protection each insured retains under the policy.