Calculating the value of the premium: the de minimis provision: effect of the de minimis limits on co-insurance
In co-insurance, several contracts of insurance are written under one policy. Each co-insurer has a separate contract of insurance with the insured, for the percentage of the risk they are covering. Under the de minimis *provision they are not allowed to apply the *de minimis *limits to the premium received under each co-insurance contract, but must apply them to the whole policy. This is because the co-insurers are, in effect, sharing a risk, and the ESC is targeted at entire risks where the related premium is *de minimis. The lead co-insurer will normally be responsible for making the decision as to whether a mixed policy is de minimis.