What is the main purpose of contingent coverage?

The main purpose of contingent coverage is to avoid gaps between policies. This type of insurance is designed to ensure that when there are overlapping areas of coverage, or when one policy may not fully cover a loss, a secondary or additional layer of insurance steps in. For example, if someone has primary insurance but has certain exclusions or limitations, contingent coverage can offer additional protection for those specific areas, thereby preventing any gaps in coverage that might leave the insured vulnerable.

This is particularly important in scenarios where multiple insurers are involved, or when a loss might fall into a gray area not fully addressed by the primary policy. The goal is to create a seamless transition between different insurance coverages, ensuring that the insured is protected at all times. It helps to build a more comprehensive risk management strategy for individuals or businesses, reinforcing the idea that all potential liabilities are adequately addressed.