One of the key principles of Protection & Indemnity cover is the 'pay to be paid' rule. This rule states that a Member is insured only for sums it has paid to satisfy covered liabilities, losses, costs, or expenses (unless the Directors decide otherwise.) Additionally, a Member must first pay these amounts from its own funds, unconditionally and not as a loan to recover from the Club's funds.
The rule also makes clear that a Club’s relationship, and liability, is to an insured Member and not to a third party claimant.
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