Which condition does NOT apply to liability coverage under common policy conditions?

Liability coverage under common policy conditions generally includes various stipulations that define the rights and responsibilities of both the insurer and the insured. Among these stipulations, several important conditions come into play, such as separation of insured, legal action against the insurer, and the implications of bankruptcy.

Separation of insured refers to the provision that policy coverage is applied separately to each insured party. This means that when multiple insureds are covered under a single policy, the actions of one insured do not affect the coverage available to the others, ensuring that each insured is treated as if they have their own separate policy.

Legal action against the insurer outlines the process and limitations concerning the policyholder's ability to pursue legal recourse against the insurance company. It usually stipulates that the insured must comply with certain conditions before taking legal action, such as the necessity of providing timely notice of loss and cooperating with the insurer’s investigation.

Bankruptcy is a condition that typically stipulates that the insurer’s obligations under the policy are not impaired by the bankruptcy of the insured. This means that even if the insured faces bankruptcy, the insurance company still honors its contractual responsibilities under the policy.

In contrast, employers liability is not a standard condition covered under common liability coverage. Instead, it is generally