Assume that a $300,000 liability claim is covered under two liability insurance contracts. Policy A has a

Question:

Assume that a $300,000 liability claim is covered under two liability insurance contracts. Policy A has a $500,000 limit of liability for the claim, while Policy B has a $125,000 limit of liability. Both contracts provide for contribution by equal shares.
a. How much will each insurer contribute toward this claim? Explain your answer.
b. If the claim were only $50,000, how much would each insurer pay?