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The situation is different where several insurers cover one or more insurable interests but they each take on different risks. For example, a large building may have total damage cover of £50M, but this cover may be split between three insurers. One insurer may insure the building for damage from £0 - £10M, and the second from £10M - £25M, and the third for damage of £25M. - £50M.

This is referred to as ‘layered� insurance. As each insurer covers a different risk, the de minimis limits may be applied to the premium covering each of the three separate risks, (that is, the premium relating to each layer).

Example of ‘layered� cover - total cover £50M:

25M - 50M ‘layer� - 3rd layer

10M - 25M ‘layer� - 2nd layer

0 -10 Million ‘layer� - 1st layer

Where a group of insurers co-insure a ‘layer� - that is, a risk in a layered insurance arrangement - the de minimis limits apply to the premium for each ‘layer� as a whole. The de minimis provision may not be applied to the premiums received by each separate co-insurer in relation to each insurer’s share of the risk.

Below is an example of ‘layered� cover. The total cover is for £50 million under a co-insurance arrangement, with three co-insurers per layer. Insurers M, N and O may, if it is appropriate, apply the de minimis provision to the whole premium for the 10-25 million layer but not to the share of the premium written by each of them on an individual basis.

25M - 50M ‘layer�: Co-insurer \nX	25M - 50M ‘layer�: Co-insurer \nY	25M - 50M ‘layer�: Co-insurer \nZ
10M - 25M ‘layer�: Co-insurer \nM	10M - 25M ‘layer�: Co-insurer \nN	10M - 25M ‘layer�: Co-insurer \nO
0 - 10 Million ‘layer�: Co- \ninsurer A	0 - 10 Million ‘layer�: Co- \ninsurer B	0 - 10 Million ‘layer�: Co- \ninsurer C