Term
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Definition
An unplanned event, unexpected and undesigned, which
occurs suddenly and at a definite place. See
also Occurrence. |
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Term
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Definition
| An unpreventable accident or event that is the result of natural causes; for example, floods, earthquakes, or lightning. |
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Term
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Definition
| An amount equal to the replacement cost of lost or damaged property at the time of loss, less depreciation. |
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Term
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Definition
A person other than the named insured who is prot
ected under the terms of the contract. Usually,
additional insureds are added by endorsement or referred
to in the wording of the definition of "insured" in
the policy itself. |
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Term
| Additiona Living Expense (ALE) |
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Definition
| Any necessary increase in living expenses incurred by the insured, so the household can maintain its normal standard of living. |
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Term
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Definition
| A representative of the insurer who seeks to determine the extent of the insurer’s liability for loss when a claim is submitted. |
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Term
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Definition
The term "All-Risks Insurance" is used to mean insura
nce against loss of or damage to property arising
from any fortuitous cause except those that are s
pecifically excluded. An insurance contract which
provides All-Risks Insura
nce is an All-Risks policy. Contrast with Named Perils. |
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Term
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Definition
| A survey by a Claims Representative or Claims Appraiser estimating the amount of damage to property and the cost to repair or the determination of a complete loss. |
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Term
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Definition
A risk which is not ordinarily acceptable to insurers and which is, therefore, assigned to insurers
participating in an assigned risk pool or plan. Each
participating company agrees to accept its share of
These risks. |
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Term
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Definition
Usually refers to Liability policies and indicates the lowe
st amount for which a policy can be written. This
amount is either prescribed by law or company policy. |
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Term
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Definition
| Liability insurance term that includes bodily harm, sickness, or disease, including resulting death |
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Term
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Definition
| A three-party contract in which one party, the surety, guarantees the performance or honesty of a second party, the principal (obligor), to the third party (obligee) to whom the performance or debt is owed. |
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Term
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Definition
| The loss of income suffered by a business when damage to its premises by a covered cause of loss causes a slowdown or suspension of its operations. |
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Term
| Business interruption Insurrance |
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Definition
| Commercial property insurance covering loss of income suffered by a business when damage to its premises by a covered cause of loss causes a slowdown or suspension of its operations. Coverage applies to loss suffered during the time required to repair or replace the damaged property. It may also be extended to apply to loss suffered after completion of repairs for a specified number of days. There are two Insurance Services Office, Inc. (ISO), business income coverage forms: the business income and extra expense coverage form (CP 00 30) and the business income coverage form without extra expense (CP 00 32). Business income coverage (BIC) is also referred to as business interruption coverage. |
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Term
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Definition
| Termination of an insurance contract before its expiration date by either the insurance company or the policyholder. |
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Term
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Definition
Sometimes used to designate the insurer. The term
"insurer" is preferred because of the possible
confusion of "carrier" with transportation. See also Insurer. |
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Term
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Definition
| Liability or loss resulting from an accident. |
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Term
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Definition
| The perils that can bring about or trigger loss or damage. Can be direct (the action immediately precedes the loss) or indirect (part of an uninterrupted chain of events leading to the loss) |
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Term
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Definition
| A demand made by the insured, or the insured’s beneficiary, for payment of the benefits as provided by the policy. |
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Term
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Definition
| The person making a demand for payment of benefits. |
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Term
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Definition
A section of a policy contract or endorsement
dealing with a particular subject. For instance, a
Subrogation Clause deals with the rights of the in
surer in the event of payment of a loss under the
contract. |
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Term
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Definition
| A clause requiring the insured maintains insurance on the property at least equal to a stipulated percentage of its value in order to collect partial losses in full.A clause requiring the insured maintains insurance on the property at least equal to a stipulated percentage of its value in order to collect partial losses in full.
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Term
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Definition
| Covers physical damage to the insured’s automobile (other than that covered under comprehensive insurance) resulting from contact with another inanimate object. |
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Term
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Definition
| Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section. |
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Term
| Continuing Education Requirement |
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Definition
| State level requirement that insurance licensees complete a minimum of insurance related education in order to be eligible for license renewal. |
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Term
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Definition
(1) An agreement entered into by two or more perso
ns under which one or more of them agree, for a
consideration, to do or refrain from doing acts in acco
rdance with the wishes of the other party(s). (2) In
insurance, the agreement by which an insurer agrees,
for a consideration, to provide benefits, reimburse
losses or provide services for an insured. A "policy"
is the written statement of
the terms of the contract.
(3) An agreement under which an agency or agent does business with an insurer. |
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Term
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Definition
| The scope of protection provided under an insurance policy. In property insurance, coverage lists perils insured against, properties covered, locations covered, individuals insured, and the limits of indemnification. In life insurance, living and death benefits are listed. |
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Term
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Definition
| The part of the policy that provides detailed information about the insured, the insurer, and the coverages. |
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Term
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Definition
| Amount of loss that the insured pays before the insurance kicks in. |
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Term
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Definition
| A decrease in the value of any type of tangible property over time. |
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Term
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Definition
| The date the coverage begins on an insurance contract (policy). |
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Term
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Definition
| An amendment to your policy written especially to cover unique items just for you. An endorsement is also a change to your policy that is made during the policy's term. An endorsement is attached to your policy to modify the terms of the insurance contract. |
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Term
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Definition
| Part of an insurance contract that excludes coverage of certain perils, persons, property, or locations. |
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Term
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Definition
| The ending date of an insurance contract (policy). |
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Term
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Definition
| Coverage for employee theft of money, securities, or property, written with a per loss limit, a per employee limit, or a per position limit. Employee dishonesty coverage is one of the key coverages provided in a commercial crime policy. |
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Term
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Definition
| Combustion sufficient to produce a spark, flame or glow which is hostile(as opposed to friendly) ie. not in the place where is was intended to be as in a furnace or fireplace) |
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Term
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Definition
1) Popularly used, an insurance policy which is called upon to pay a loss before others covering the
same risk. (2) A contract written in such an amount
as to cover only an insured's expected loss during the
policy period with no other insurance in existence. |
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Term
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Definition
| Deception or artifice used to cheat or intentionally mislead. This is closely related to misrepresentation and concealment. Proof of fraudulent acts by an insured in procuring insurance may lead to a denial of coverage and voiding of the policy by the insurer. As a loss exposure, certain types of fraud can be insured by a commercial crime insurance policy. |
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Term
| General Liability Insurance |
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Definition
| Insurance designed to protect business owners and operators from a wide variety of liability exposures. Exposures could include liability arising from accidents resulting from the insured’s premises or operations, products sold by the insured, operations completed by the insured, and contractual liability. |
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Term
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Definition
| Situation or condition that increases the possibility or extent of a loss. |
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Term
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Definition
| A type of Homeowner's policy that provides coverage to A (structure) and Coverage B Personal property on a named peril basis. |
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Term
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Definition
| A type of homeowner's policy that provides coverage to Coverage A (structure) for All Risks or Physical Loss, unless specifically excluded and to Coverage B (personal property) on a Named peril basis |
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Term
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Definition
| Amt you must pay out of pocket before hurricane insurance will kick in. Many insurers in hurricane prone states are selling homeowners insurance policies with percentage deductibles used for claims such as fire and theft. percentage deductible vary form one p[ercent of a home's insured value to 15 percent. |
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Term
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Definition
| Expenses paid plus reserves for expenses to be paid. |
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Term
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Definition
| Restoration to the victim of a loss by payment, repair or replacement. |
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Term
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Definition
| A claims adjuster who provides services on a contract basis to insurance companies, self-insured firms, and governmental entities. Depending on the nature of the claim being handled, billing can be on a time-and-expense basis, flat fee-per-claim basis, or flat annual fee for all claims. Independent adjusters are used when an insurer is overloaded with claims (often due to a catastrophe), when a claim occurs in a remote locale, or when special expertise is required to adjust a claim. |
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Term
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Definition
| An exclusion found in most property insurance policies eliminating coverage for loss caused by a quality in property that causes it to damage or destroy itself. |
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Term
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Definition
| Property insurance for property in transit over land, certain types of moveable property, instrumentalities of transportation (such as bridges, roads, and piers, instrumentalities of communication (such as television and radio towers), and legal liability exposures of bailees. Many inland marine coverage forms provide coverage without regard to the location of the covered property; these are sometimes called "floater" policies. As a group, inland marine coverage forms are generally broader than property coverage forms |
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Term
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Definition
| Interest in property such that loss or destruction of the property could cause a financial loss. |
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Term
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Definition
A risk which meets most of the following requisites:
(1) The loss insured against must be capable of being
defined. (2) It must be accidental. (3) It must be large
enough to cause a hardship to the insured. (4) It
must belong to a homogeneous group of risks large enough to make losses predictable. (5) It must not be
subject to the same loss at the same time as a lar
ge number of other risks. (6) The insurance company
must be able to determine a reasonable cost for the
insurance. (7) The insurance company must be able
to calculate the chance of loss. |
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Term
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Definition
| A contractual relationship that exists when one party (the insurer) for a consideration (the premium) agrees to reimburse another party (the insured) for loss to a specified subject (the risk) caused by designated contingencies (hazards or perils). The term "assurance," commonly used in England, is considered synonymous with "insurance. |
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Term
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Definition
| The person(s) protected under an insurance contract. |
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Term
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Definition
| The insurance company that undertakes to indemnify for losses and perform other insurance-related operations. |
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Term
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Definition
| Any legally enforceable obligation. Within the context of insurance, the obligation to pay a monetary award for injury or damage caused by one's negligent or statutorily prohibited action. |
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Term
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Definition
| Loss History, or Loss Runs, is an insurance document detailing the claims that your current and/or previous insurance carrier has paid out to you while you were insured by them. In order for you to receive a new quote for commercial insurance from a competing agent, loss runs or loss history is required to determine the extent of the risk involved in insuring your business. |
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Term
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Definition
| A person or entity that is entitled to all or part of the insurance proceeds in connection with the covered property in which it has an interest. Often those asking to be named as loss payees have leased some type of equipment to the insured—a photocopy machine, for example. Several different loss payee clauses address different insurable interest situations. A loss payee is also common in a personal auto policy (PAP) in which the automobile is financed. The lending institution would be listed as the loss payee on the declarations page |
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Term
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Definition
| Proportionate relationship of incurred losses to earned premiums expressed as a percentage. If, for example, a firm pays $100,000 of premium for workers compensation insurance in a given year, and its insurer pays and reserves $50,000 in claims, the firm's loss ratio is 50 percent ($50,000 incurred losses/$100,000 earned premiums). |
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Term
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Definition
| A type of insurance designed to provide coverage for the transportation of goods either on the ocean or by land as well as damage to the waterborne instrument of conveyance and to the liability for third parties arising out of the process. The two branches of marine insurance are ocean marine (primarily water-based exposures) and inland marine (primarily land-based exposures). |
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Term
| Material Misrepresentation |
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Definition
| Deliberate hiding or falsification of a material fact which, if known to the other party, could have aborted, or significantly altered the basis of, a contract, deal, or transaction. |
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Term
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Definition
| Mitigation is the effort to reduce loss of life and property by lessening the impact of disasters. Mitigation is taking action now—before the next disaster—to reduce human and financial consequences later (analyzing risk, reducing risk, insuring against risk). Effective mitigation requires that we all understand local risks, address the hard choices, and invest in long-term community well-being. Without mitigation actions, we jeopardize our safety, financial security, and self-reliance. |
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Term
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Definition
| The disappearance of insured property in an unexplained manner. For example, if a ring is left in a public place and the owner returns later to find the ring gone, it is reasonable to assume that the ring has been stolen. However, there is no direct evidence that this is in fact what happened. This would be an example of mysterious disappearance. |
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Term
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Definition
| Any person, firm, or organization, or any of its members specifically designated by name as an insured(s) in an insurance policy, as distinguished from others that, although unnamed, fall within the policy definition of an "insured." |
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Term
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Definition
| A tort involving failure to use a degree of care considered reasonable under a given set of circumstances. Acts of either omission or commission, or both, may constitute negligence. The four elements of negligence are a duty owed to a plaintiff, a breach of that duty by the defendant, proximate cause, and an injury or damage suffered by the plaintiff. Liability policies are designed to cover claims of negligence. |
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Term
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Definition
Termination of insurance coverage at an expiration da
te or anniversary date. This action may be taken by
an insurer who refuses to renew, or by an insured who rejects a renewal offer. |
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Term
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Definition
Notice to an insurer that a loss has occurred. Notice
of loss is a condition of most policies, and it is
frequently required within a given time and in a particular manner. |
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Term
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Definition
| A person or organization to whom another party (the "obligor") owes an obligation. In a bonding situation, this is the party that requires and receives the protection of the bond. For example, under a performance bond, the obligee is the project owner for whom the bonded contractor is required to perform the specified work. |
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Term
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Definition
| A person or organization that is bound by an obligation to another. In a bonding situation, this party, commonly called the "principal," purchases a bond to protect the party to whom it owes an obligation. For example, under a performance bond, the obligor is the contractor that is required to perform the specified work for the project owner. |
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Term
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Definition
| In a commercial general liability (CGL) coverage form, an accident, including continuous or repeated exposure to substantially the same general harmful conditions. General liability policies insure liability for bodily injury (BI) or property damage (PD) that is caused by an occurrence. This is also a common homeowners provision |
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Term
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Definition
Overhead and profit are distinct elements of cost, although they are frequently referred to together.
Overhead encompasses fixed costs for any business … it includes salaries, office rent, utilities and business licenses. The contractor usually recovers these costs by charging a flat percentage of 10% on each estimate.
Profit is the amount over the costs of a job that the contractor expects to earn for his or her services. The primary services are to coordinate, schedule and supervise the activities of the various subcontractors. A common allowance is 10%, in addition to 10% overhead. This is referred to as “ten and ten”. In some areas, contractors routinely use the “ten on ten” method, which results in a total of 21%. |
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Term
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Definition
| Cause of loss—for example, fire, windstorm, collision. |
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Term
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Definition
| Insurance purchased by an individual (as opposed to an organization) to protect against personal risks. |
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Term
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Definition
| The term of duration of the policy. The policy period encompasses the time between the exact hour and date of policy inception and the hour and date of expiration. |
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Term
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Definition
| A written contract of insurance between the insurer and the policyholder. It is typically composed of a declarations page, policy form, and endorsements or riders that amend the policy form. |
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Term
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Definition
| (1) In a property insurance policy, the location where coverage applies. Usually described in the policy with a legal address. (2) Building or land occupied or owned by an insured. |
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Term
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Definition
| The amount of money an insurer charges to provide the coverage described in the policy or bond. |
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Term
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Definition
| Prior Damage is simply defined as any damage that existed before the time of your car accident. Typically, collision repair experts and mechanics can indicate the age of the damage on your vehicle, which will prove if there was damage before the time of the accident. Collision repair experts will also be able to decipher where there are new damages on your car which will need to be discussed with your insurance company. |
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Term
| Products Liability Insurance |
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Definition
| Protection against financial loss arising out of the legal liability incurred by an insured because of injury or damage resulting from the use of a covered product or out of the liability incurred by a contractor after a job is completed (completed operations cover). |
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Term
| Professional Liability Insurance? |
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Definition
| A type of liability coverage designed to protect traditional professionals (e.g., accountants, attorneys) and quasi-professionals (e.g., real estate brokers, consultants) against liability incurred as a result of errors and omissions in performing their professional services. Although there are a few exceptions (e.g., physicians, architects, and engineers), most professional liability policies only cover economic or financial losses suffered by third parties, as opposed to bodily injury (BI) and property damage (PD) claims. This is because the latter two types of loss are typically covered under commercial general liability (CGL) policies. The vast majority of professional liability policies are written with claims-made coverage triggers. In addition, professional liability policies contain what are known as "shrinking limits," meaning that unlike CGL policies (where defense costs are paid in addition to policy limits), the insurer's payment of defense costs reduces available policy limits. Accordingly, when attempting to determine appropriate policy limits, insureds must consider the fact that because defense costs are often a high proportion of any claim settlement or judgment, they must usually purchase additional limits. The most common exclusions in professional liability policy forms are for BI, PD, and intentional/dishonest acts |
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Term
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Definition
| A formal statement made by the insured to the insurer regarding a claim, especially in property insurance, so that the insurer may determine its liability under the policy. |
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Term
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Definition
The cause having the most significant impact in bringing about the loss under a first-party property insurance policy, when two or more independent perils operate at the same time (i.e., concurrently) to produce a loss. Courts employ a set of proximate cause rules to resolve causation disputes when a property policy states that it covers or excludes losses "caused by" a peril and there is more than one peril at work in a fact pattern. Under common law, whether the policy provides coverage depends on which peril is chosen as the proximate cause. If the peril selected as the proximate cause is covered, courts consider the loss to have been caused by the covered peril and will hold that the loss is covered. If the peril selected as the proximate cause is uncovered or excluded, courts consider the loss to have been caused by the uncovered or excluded peril and will hold that the loss is not covered.
In the context of third-party liability insurance, proximate cause refers to a doctrine by which a plaintiff must prove that the defendant's actions set in motion a relatively short chain of events that could have reasonably been anticipated to lead to the plaintiff's damages. If the defendant's actions were "proximate" or close enough in the chain of causation to have foreseeably led to the plaintiff's damages, courts will impose liability. Otherwise, if the defendant's actions set in motion a long, bizarre chain of events that could not have reasonably been foreseen to lead to the plaintiff's damages, courts will not impose liability. In tort law, multiple actions by one or more defendants that are a substantial factor in producing the loss can qualify as proximate causes. |
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Term
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Definition
| A claims adjuster who represents the interests of an insured in a property loss. Public adjusters negotiate settlement of such claims with the insurer's claim representative. Public adjusters are compensated with a percentage of the payable loss that they are able to secure for their clients (2 to 15 percent, depending upon the size and complexity of the claim). They are frequently retained in situations involving business interruption (BI) claims, which involve special expertise in the areas of accounting and insurance coverage analysis. |
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Term
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Definition
| The exchanging of reinsurance between two reinsurers, frequently in equal amounts. The purpose of such transactions is to balance underwriting results for both companies. |
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Term
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Definition
| damaged insured property in receipt by the insurance company resulting from abandonment and salvage , subrogation , and reinsurance . |
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Term
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Definition
| Insurance policies in which the insured must first pay losses out-of-pocket and then seek reimbursement for any covered loss from the insurer, as opposed to policies in which the insurer is required to "pay losses on behalf of" an insured. |
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Term
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Definition
| A property insurance term that refers to one of the two valuation methods for establishing the value of most of the insured property for purposes of determining the amount the insurer will pay in the event of loss. It is usually defined in the policy as the cost to replace the damaged property with materials of like kind and quality, without any deduction for depreciation. |
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Term
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Definition
| An amount of money earmarked for a specific purpose. Insurers establish unearned premium reserves and loss reserves indicated on their balance sheets. Unearned premium reserves show the aggregate amount of premiums that would be returned to policyholders if all policies were canceled on the date the balance sheet was prepared. Loss reserves are estimates of outstanding losses, loss adjustment expenses (LAEs), and other related items. Self-insured organizations also maintain loss reserves. |
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Term
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Definition
| A form that is attached to a surety or fidelity bond that alters the provisions of the bond form in some manner. A rider is the surety and fidelity equivalent of an insurance policy endorsement, and though not common, insurance endorsements are sometimes called riders. |
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Term
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Definition
| (1) Uncertainty arising from the possible occurrence of given events. (2) The insured or the property to which an insurance policy relates. |
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Term
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Definition
| (1) Property after it has been partially damaged by an insured peril such as a fire. (2) As a verb, to save endangered property and to protect damaged property from further loss. |
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Term
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Definition
| The amount of damage that is (or that may be) inflicted by a loss or catastrophe. Sometimes quantified as a severity rate, which is a ratio relating the amount of loss to values exposed to loss during a specified period. |
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Term
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Definition
| individual employed by a property and casualty insurance company to settle on its behalf claims brought by insureds. The adjuster evaluates the merits of each claim and makes recommendations to the insurance company. |
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Term
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Definition
| The assignment to an insurer by terms of the policy or by law, after payment of a loss, of the rights of the insured to recover the amount of the loss from one legally liable for it. |
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Term
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Definition
| A contract under which one party (the surety) guarantees the performance of certain obligations of a second party (the principal) to a third party (the obligee). For example, most construction contractors must provide the party for which they are performing operations with a bond guaranteeing that they will complete the project by the date specified in the construction contract in accordance with all plans and specifications. |
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Term
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Definition
| A party that guarantees the performance of another. The contract through which the guarantee is executed is called a surety bond. |
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Term
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Definition
| An insurance policy purchased for protection against the actions of another party. Third-party insurance is purchased by the insured (first party) from an insurance company (second party) for protection against another party's claims (third party). |
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Term
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Definition
A loss of sufficient size so that it can be said there is
nothing left of value. The complete destruction of the
property. The term is also used to mean a loss r
equiring the maximum amount a policy will pay. |
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Term
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Definition
For Property coverage, if a company and a claimant
fail to agree on the amount of loss, each may appoint
an appraiser, and these in turn select an umpire. A decis
ion by any two of the three is binding. |
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Term
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Definition
| Any individual in insurance who has the responsibility of making decisions regarding the acceptability of a particular submission and of determining the amount, price, and conditions under which the submission is acceptable. |
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Term
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Definition
The process of selecti
ng risks and classifying them
according to their degrees of
insurability so that the
appropriate rates may be assigned. The process also includes
rejection of those risks that do not qualify. |
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Term
| Uninsured Motorist Coverage |
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Definition
| Coverage for bodily injury (BI) and, in some states, property damage (PD) incurred by an insured when an accident is caused by a motorist who is not insured. This coverage allows an insured to collect from his or her insurer as if it provided liability coverage for the negligent third party. |
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