Subscription Policy
A subscription policy is an insurance policy on which two or more insurers share the risk. One insurer is the lead insurer responsible for managing the policy. Each participating insurer agrees to carry a set percentage of the insured risk until the risk is covered in full. This process is referred to as ‘subscription underwriting’. Should a claim occur, each insurer pays out according to their coverage percentage. Subscription policies are used when the total coverage required is more than any one underwriter is willing to carry.
Related terms: Lloyd’s, underwriting.