Which insurance policy provision dictates that two policies on a single risk will share losses equally?

The provision that determines how two insurance policies on a single risk share losses equally is known as "contribution by equal shares." This approach ensures that when multiple policies cover the same risk, they will contribute equally to the payout of a loss up to their limits, rather than one policy paying a disproportionate share of the claim.

This method is particularly useful in preventing overpayment and ensuring that both insurers fulfill their obligations fairly when a claim arises. Under this provision, if a claim occurs, both policies will respond to the claim and pay equal amounts until the loss is fully covered, or until whichever comes first, typically dictated by the policy limits.

In contrast, other options like pro-rata liability involve dividing losses based on the coverage amounts or limits specified in each policy rather than sharing equally. Excess coverage relates to policies that cover losses only after another primary policy has reached its limit, while apportionment usually involves allocating specific amounts based on predetermined factors rather than equal sharing.