escape clause

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An escape clause is a contractual provision that absolves one party to the contract of performance under specific conditions. An escape clause relieves one party of liability for nonperformance if certain conditions are met.

Insurance policies frequently contain escape clauses. A specific escape clause provision common to insurance policies is the “other insurance clause,” which allows an insurance company to avoid all liability in the event that other insurance may cover the claim (other insurance clauses may also take the form of a pro-rata clause or an excess clause). 

[Last updated in June of 2021 by the Wex Definitions Team]