Multi-trigger/dual trigger programme

Two separate events combine to trigger a payment by the insurer only when the second event occurs. The latter is frequently linked to a metric or index outside the control of the insured in order to avoid moral hazard but correlates closely with the policyholder’s financial interests. For example, a dual trigger policy for a private hospital’s medical malpractice risk pays: (a) if the actual malpractice claims exceed a certain amount only if (b) the hospital’s equity portfolio value falls below a specified level during the same period.

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