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A
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ACCOUNTS RECEIVABLE INSURANCE - Coverage
when business records are destroyed by an insured peril and
the business cannot collect money owed.
ACTUAL CASH VALUE - Cost of replacing damaged
or destroyed property with comparable new property, minus
depreciation and obsolescence.
ADDITIONAL EXCLUSIONS AND WARRANTIES - This
section of a policy details liabilities that will not be covered
and specifies additional things for which you are responsible.
ADDITIONAL INSURED - In property and liability
insurance, another person, firm or other entity enjoying the
same protection as the named insured.
ADMITTED COMPANY - Insurance company licensed
by a particular state to conduct business there. The company
is subject to the state insurance code governing such aspects
as company reserves and advertising.
AGENCY - Individuals under common management
whose goal is to sell and service insurance
AGENT - There are two types: (1) An individual
who sells and services insurance policies either as an independent
agent representing at least two insurance companies and services
clients by searching the market for the most advantageous
price for the most coverage or (2) a direct writer (captive
agent) representing only one company and sells only its policies.
AGGREGATE LIMIT - Predetermined (maximum)
dollar amount of coverage in force in under a health insurance
policy, a property damage policy, or a liability policy regardless
of the number of claims submitted or defense costs associated
with these claims.
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BINDER - Temporary insurance contract providing
coverage until a permanent policy is issued.
BROKER - Insurance salesperson who searches
the marketplace in the interest of clients, not insurance
companies.
BROKER-AGENT - Independent insurance salesperson
who represents particular insurers but may also function as
a broker by searching the entire insurance market to place
an applicant’s coverage to maximize protection and minimize
cost. This person is licensed as an agent and broker
BUSINESS INTERRUPTION INSURANCE - Indemnification
for the loss of profits and the continuing fixed expenses.
BUSINESS LIABILITY INSURANCE - Coverage
for liability exposure resulting from the activities of a
business. The policy usually consists of a DECLARATIONS SECTION,
INSURING AGREEMENTS, EXCLUSIONS, and CONDITIONS
BUSINESS OWNERS POLICY (BOP) - Combination
property, liability, and business interruption policy. It
is usually written to cover expenses of small and medium size
businesses resulting from (1) damage or destruction of business’s
property or (2) when actions or non-actions of the business’s
representatives result in bodily injury or property damage
to another individual(s).
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CARRIER - Insurance company that actually
underwrites and issues the insurance policy. The term is used
because the insurance company assumes or carries the risk
for policy owners.
CASUALTY - Liability or loss resulting from
an accident.
CASUALTY INSURANCE - Coverage primarily
for the liability of an individual or organization which results
from negligent acts and omissions, thereby causing bodily
injury and/or property damage to a third party.
CLAIM - Request by an insured for indemnification
(compensation) by an insurance company for loss incurred from
an insured peril.
CLAIMANT - One who makes a claim.
COINSURANCE -
Defines the amount of each loss that the company pays according
to a formula. The indemnification of the insured for a property
loss can never exceed (1) the dollar amount of the actual
loss (2) the dollar limits of the insurance policy (3) the
dollar amount determined the coinsurance relationship. The
lesser of the above three amounts will always apply
COINSURANCE PENALTY - Reduction in the amount
that the insured receives from the insurer, after having incurred
a property loss, because the insured failed to carry the amount
of coverage required by the coinsurance clause.
COMMERCIAL GENERAL LIABILITY - Covers your
liability for accidental bodily injury and property damage
arising out of the operation of your business.
COMMON POLICY CONDITIONS - Describes the
duties, rights and coverage provisions that must be understood
and complied with for coverage to apply.
COMMON POLICY DEFINITIONS - These define
the key terms and phrases in a policy. These apply to all
coverages within the policy unless they are modified by endorsement
attached to the policy.
COVERAGE - Protection under an insurance
policy.
COVERED LOSS - Questions regarding loss
coverage include: Is the peril covered? Is the property covered?
Is the person covered? Is the policy in force? Are the limits
of coverage adequate? Is the location covered? Has the hazard
been increased? Answers to these and other questions determine
if a loss is covered.
CRIME INSURANCE - Coverage for the perils
of burglary, theft and robbery.
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DAMAGES - The sum the insurance company
is legally obligated to pay an insured for losses incurred.
DECLARATIONS SECTION - In property and casualty
insurance, contract section containing such information as
name, description, and location of insured property, name
and address of the insured, period a policy is in force, premiums
payable, and amount of coverage.
DEDUCTIBLE - A portion of the damages/expenses
from a claim that are not covered by the policy and for which
the insured will have to pay.
DEDUCTIBLE PROVISIONS - Details how deductibles
will be applied on any claim.
DEFENSE COSTS - Expense
of defending a lawsuit.
DIRECTORS AND OFFICERS LIABILITY INSURANCE
- Coverage when a director or officer of a company commits
a negligent act or omission, or misstatement or misleading
statement, and a successful libel suit is brought against
the company as a result.
DISABILITY - Physiological or psychological
condition which prevents an insured from performing normal
job functions (also, see STATE
DISABILITY PLAN).
DISABILITY BENEFIT - Income paid under a
disability policy that is not covered under Workers' Compensation
Benefits.
DRAM SHOP LIABILITY INSURANCE
- Coverage for dispensers of alcoholic beverages against suits
arising out of bodily injury and/or property damage caused
by its customers to a third party (see LIQUOR
LEGAL LIABILITY COVERAGE).
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EFFECTIVE/EXPIRATION DATE
- Date and time (usually 12:01 A.M.) at which coverage begins
and ends.
EMPLOYERS' LIABILITY COVERAGE - (see WORKERS'
COMPENSATION).
EMPLOYMENT PRACTICES LIABILITY - Is generally
defined as the results of actual or alleged wrongful termination,
sexual harassment or discrimination against an employee or
application.
EQUIPMENT FLOATERS INSURANCE
- Coverage for property that moves from location to location
from the perils of fire, lightning, explosion, windstorm,
earthquake, collapse of bridges, flood, and collision.
ERRORS AND OMISSIONS LIABILITY INSURANCE
- Policies generally available to the various professions
that require protection for negligent acts and/or omissions
resulting in bodily injury, personal injury, and/or property
damage liability to a client.
EXCLUSIONS - Specifications of certain types
of liabilities or certain circumstances for which your policy
will not provide any coverage.
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FIRE LEGAL LIABILITY - Limited coverage
for damage to a premise caused by a fire for which you may
be held liable.
FLOATER - see EQUIPMENT
FLOATERS INSURANCE.
FOREIGN INSURER - Insurance company whose
domicile is in a state other than the one in which the company
is writing business (see NON-ADMITTED
INSURER).
FRAUD - A dishonest act.
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GROUP HEALTH INSURANCE - Coverage underwritten
on members of a natural group, such as employees of a particular
business, union, association, or employer group.
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HEALTH INSURANCE - Three basic plans are
available to cover the costs of health care: COMMERCIAL HEALTH
INSURANCE, (private noncommercial (Blue Cross/Blue Shield),
and SOCIAL INSURANCE (Social Security). See also MEDICAID;
MEDICARE; and WORKERS'
COMPENSATION INSURANCE.
HAZARD - Circumstance that increases the
likelihood or probable severity of a loss.
HOST LIABILITY - Exposure created by an
individual acting as a host serving alcoholic beverages at
no charge to persons already intoxicated, resulting in these
intoxicated individuals causing property damage and/or bodily
injury to third parties. See also DRAM
SHOP LIABILITY INSURANCE.
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IMPROVEMENTS AND BETTERMENTS - Tenant’s
modifications of leased space to fit his their particular
needs. Up to 10% contents coverage inside the structure may
be applied to insure against damage or destruction of improvements
or betterments made by a tenant who does not carry coverage
on the structure itself.
INDEMNIFY - To restore to original status
or condition. Usually refers to reimbursement for a loss.
INLAND MARINE INSURANCE - (Transportation
Insurance) coverage for (1) property damage or destruction
of an insured’s property and (2) liability exposure
of an insured for damage or destruction of someone else’s
property under his/her care, custody, or control.
INSPECTION - In property or liability insurance,
the right retained by the company to inspect the insured premises
as well as its operations in order to detect inherent structural
defects and other hidden hazards.
INSURED - Party covered by an insurance
policy.
INSURED PERIL - Source of loss which is
covered under an insurance policy.
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K
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L
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LAPSE - In property and casualty insurance,
termination of a policy because of failure to pay a renewal
premium.
LIABILITY - Your legal responsibility for
damages.
LIFE INSURANCE - Protection against the
death of an individual in the form of payment to a beneficiary
– usually a family member, business, or institution.
LIMITS OF INSURANCE - Describes the total
amount of money available for each coverage part, for each
occurrence/offense for a given policy year.
LIQUOR LEGAL LIABILITY
COVERAGE - Covers you or your business from liability
arising from laws which make an establishment and or it's
owners liable for injuries caused by it's customers to third
parties.
LOSS - Damage through an insured’s
negligent acts and/or omissions resulting in bodily injury
and/or property damage to a third party; damage to an insured’s
property; or amount an insurance company has a legal obligation
to pay.
LOSS OF INCOME INSURANCE - Coverage in property
insurance for an employee’s lost income if a peril such
as fire damages or destroys the place of employment, causing
the worker to become unemployed.
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MEDICAID - Assistance
program for the financially needy.
MEDICAL PAYMENTS - Covers the medical expenses
of persons other than the insured - regardless of who is liable.
MEDICARE - Program
to provide medical benefits to those 65 and over.
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NEGLIGENCE - Failure to act with the legally
required degree of care for others, resulting in harm to them.
NON-ADMITTED INSURER
- Company not licensed by a particular state to sell and service
insurance policies within that state.
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OCCURRENCE BASIS (FORM) - Coverage, in liability
insurance, for harm suffered by others because of events occurring
while a policy is in force, regardless of when a claim is
actually made.
OCCURRENCE LIMIT - Maximum amount that an
insurance company is obligated to pay ll injured parties seeking
recourse as the result of the occurrence of an event covered
under a Liability Insurance policy.
ORDINARY LIFE INSURANCE
(WHOLE LIFE) - Policy that remains in full force
and effect for the life of the insured, with premium payments
being made for the same period.
OTHER INSUREDS - Individuals or organizations
covered by PROPERTY
AND LIABILITY INSURANCE other than the named insured.
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PACKAGE POLICY - Several basic property
and/or liability policies combined to form a single policy.
PEAK SEASON ENDORSEMENT - An endorsement
to a property insurance policy which provides additional limits
of protection on a merchant’s inventories during specific
time intervals, usually when shopping is most intense.
PERIL - Exposure to
the risk of being injured, destroyed, or lost (see also RISK).
PERSONAL/ADVERTISING INJURY - Wrongful conduct
causing false arrest invasion of privacy, libel, defamation
of character and bodily injury; in addition to the foregoing
it also provides coverage for negligent acts and /or omissions
in advertising (both oral and written) that may result in
a civil suit for slander or copyright infringement.
POLICY - Written agreement which puts insurance
coverage into effect.
POLICYHOLDER - Individual or other entity
who owns an insurance policy. Synonymous with policyowner.
POLICY LIMIT - Maximum sum the insurance
company will pay on that policy for which the business becomes
legally obligated to pay.
POLICY PERIOD/TERM - Time interval during
which the policy is in force (see also EFFECTIVE/EXPIRATION
DATE).
POLICY PROVISIONS - Words, sentences, and
paragraphs in an insurance policy.
PREMIUM - Rate that an insured is charged,
reflecting his/her expectation of loss or risk.
PRODUCTS AND COMPLETED OPERATIONS INSURANCE
- Coverage fo an insured for claims after a manufactured product
has been sold and/or a claim results from an operation which
the manufacturer has completed.
PROFESSIONAL LIABILITY INSURANCE - Coverage
for specialists in various professional fields.
PROPERTY AND LIABILITY
INSURANCE - Coverage for an insured whose property
is damaged or destroyed by an insured peril, or whose negligent
acts or omissions damage or destroy another party’s
property or cause bodily injury to another party.
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R
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REPLACEMENT COST - Sum it takes to replace
an insured’s damaged or destroyed property with one
of like kind and quality, equivalent to the actual cash value,
minus physical depreciation (fair wear and tear) and obsolescence.
REPORTING PERIOD - The very specific requirements
and restrictions for the timely reporting of occurrences,
claims or suits by the policyholder.
RISK - Uncertainty of
financial loss; term used to designate an insured or a peril
insured against. (also, see PERIL).
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STATE DISABILITY PLAN
- Account established and administered by a state agency to
finance a mandatory state insurance program for job-related
injuries or to finance a non job-related injuries program
on a state-wide basis. (see WORKERS'
COMPENSATION INSURANCE).
SUBROGATION/SUBROGATION CLAUSE - Section
of PROPERTY INSURANCE and LIABILITY INSURANCE policies giving
an insurer the right to take legal action against a third
party responsible for a loss to an insured for which a claim
has been paid.
SURPLUS LINES (EXCESS-SURPLUS LINES) - Specialized
property or liability coverage provided by a NONADMITEED INSURER
in instances where it is unavailable from insurers license
by the state.
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TERM LIFE INSURANCE - Low-cost life insurance
which stays in effect for only a specified, limited period
TRANSIT INSURANCE - Inland Marine policy
that protects an insured against loss for property that is
shipped.
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UMBRELLA LIABILITY POLICY - Excess liability
coverage above the limits of a basic business liability insurance
policy such as OWNERS, LANDLORDS AND TENANTS LIABILITY POLICY.
UNDERINSURED/UNDERINSURANCE -
1. Failure to maintain adequate coverage for a specific loss
or damage.
2. Failure to meet a COINSURANCE
requirement
UNDERWRITER - Individual who works in the
home office of an insurance company and performs the function
of UNDERWRITING
to determine if an applicant is insurable at preferred rates
standard rates, substandard rates or uninsurable.
UNDERWRITING
- Process of examining, accepting, or rejecting insurance
risks, and classifying those selected, in order to charge
the proper premium for each.
UNIVERSAL LIFE INSURANCE - ADJUSTABLE LIFE
INSURANCE under which (1) premiums are flexible, not fixed;
(2) protection is adjustable, not fixed; and (3) insurance
company expenses and other charges are specifically disclosed
to a purchaser.
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VARIABLE LIFE INSURANCE - Investment-oriented
whole life insurance policy that provides return linked to
an underlying portfolio of securities (typically mutual funds).
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WHOLE LIFE INSURANCE - (See ORDINARY
LIFE INSURANCE)
WORKERS' COMPENSATION INSURANCE
- Coverage providing four types of benefits (medical care,
death, disability, rehabilitation) for employeejob-related
injuries or diseases as a matter of right (without regard
to fault).
X
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Y
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Z
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