What does Segregation of Exposure Units mean? Read on to discover the definition & meaning of the term Segregation of Exposure Units - to help you better understand the language used in insurance policies.
Segregation of Exposure Units
The segregation of exposure units is the process of literally separating things that represent risks to the insured into two different areas. For example, a company may store assets in two different banks to reduce the risk of losing all of the assets if one of the banks is robbed. Segregation of exposure is essentially a way to hedge against risk.
More Insurance Terms And Definitions
The Merriam-Webster Dictionary defines insurance as:
b: Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.
c: The sum for which something is insured.
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