Insurance Terms Glossary

One party's agreement to the purchase offer of another party, such that a legal contract is formed and both parties are contractually bound. With an insurance contract, acceptance generally takes place when the producer binds coverage or the policy is issued. See also contract.

A sudden and unexpected event that results in a financial loss. See also occurrence.

Bodily injury resulting from an accident.

A form of insurance providing benefits in the event of accidental death or the accidental loss of sight (or loss of a member(s), such as an arm or leg).

A lump-sum payment for loss of life due to an accident that was the direct cause of death. The cause of the mishap must be accidental for a benefit to be payable under the policy.

An unforeseen, unexpected, unintended cause of an accident that results in an injury. The cause of the action and the result must not be intentional or there will be no coverage.

A percentage increase made in the benefits available under the policy. It is intended as a bonus to the insured for continuous renewals. (It is not usually included in policies issued currently.)

Accident or event resulting from natural causes, without any human intervention, that reasonable foresight or care could not have prevented, such as flood, lightning, earthquake, or storms.

The replacement (current) cost of an item minus depreciation from wear and tear or obsolescence.

A mathematician who specializes in the field of insurance. The actuary determines, on the basis of existing experience, the rate to be chareged for various lines of insurance and reserves to be set aside for payment of losses.

An individual or business, other than the named insured on the declarations page, who has a financial interest requiring protection under the terms or the contract (e.g., the lien holder on the loan for a car or a bank for a mortgage).

This is insurance coverage that pays for extra necessary living costs incurred during the time it takes to repair or replace insured property that has been damaged or destroyed by an insured peril.

The salaried employee of an insurance company, or an independent contractor representing an insurance company, who is responsible for determining the cause and amount of a loss, the insurance company's liability for the loss and the satisfactory agreement on such from the parties involved (insured and insurer).

An insurer that meets the licensing criteria of the state it wishes to do business in and has recieved a certificate of authority. Also known as an authorized company.

The tendency of insureds who present a high probability of loss to purchase or renew insurance more often than those who present a lower probability; selection against the best interests of the insurance company ( e.g., people near rivers purchasing flood insurance).

An authorized representative of an insurance company(ies) who solicits, negotiates, or countersigns life insurance and/or annuity contracts (in many companies he also sells health insurance). An agent represents the company.

The maximum dollar amount that can be under any policy for any disability or period of disability.

The maximum limit of liability the company is obligated to pay for all claims within a specific time period, usually one policy year.

This is an option for property policies by which the insured and the company agree to or stipulate to the value of property. Suspends the coinsurance clause.

This provides coverage for direct loss or damage to aircraft.

A kind or contract in which one party may obtain greater value under the agreement than the other party and in which payment depends on a fortuitous event. An insurance contract is an aletory contract.

An insurance company incorporated and organized under the laws of a foreign nation, state, province, or territory, rather than under the laws of the United States.

These are lines of insurance generally related to property insurance, such as sprinkler leakage, glass, water damage, and earthquake coverage.

A contract providing periodic income payments for a fixed period of time or during the lifetime of an annuitant. It may be defined as the systematic liquidation or an estate.

A life annuity contract that provides that upon the death of an annuitant, the beneficiary (or his estate) will receive a lump sum payment, which represents the difference between the amount the annuitant paid to the insurance company and the total income payments received by the annuitant.

Payable for a minimum specified period and continuing thereafter throughout the lifetime of the annuitant.

Payments commence more than one year after the payment of the first (or single) premium to the insurance company, usually at a selected retirement age.

The income commences one, three, six, or 12 months after its purchase.

Similar to a cash refund annuity, except that money is refunded in installment payments and the insurance company makes payments to the designated beneficiary until the total of the payments made to the annuitant and the beneficiary equals the consideration paid.

An annuity issued on the lives of two or more persons, which is payable as long as one of them survives.

The questionnaire completed by a prospect or insurnace professional that will be used during the underwriting of the policy. For contractual purposes, the application is considered the offer to purchase.

An estimate of the value of, or the amount of loss or damage to, insured property.

The provision in an insurance policy that sets forth the duties of the insured and the insurer when there is a dispute over the amount of loss. For example, a fire insurance policy provides for appraisal at the demand or either party after a loss.

The process of settling differences relating to loss under an insurance policy between the insured and the insurer. Each party selects a representative who in turn selects a disinterested arbitrator whose decision or award is binding on both parties to the insurance contract.

A felonious and deliberate act of burning property.

An additional fixed charge or proportionate share of claims expenses sometimes levied against policyowners by an assessment mutual insurance company when premioums are insufficient to meet its cost of operations.

An uninsurable individual or company that is assigned an insurance company from a pool of insurers (usually all that hold certificates of authority in a specific state). Although the company must accept the risk, it may charge an appropriate premium.

A person, firm, or corporation to whom the rights under a contract are assigned in their entirety or in part.

The legal transfer of a policyowner's rights or interests in an insurance policy to another party. The insured requests the assignment, and, barring state law, the company can either accept or reject the request.

Individual policies written to cover members or a trade or professional association (e.g., American Medical Association or the Ohio Association of Hat Manufactures).

The acceptance of the risk presented to an insured, including full responsibility for any loss that may occur.

Person for whom insurance is provided. See insured.

The legal process that prevents the removal of property belonging to another party pending a court's decision concerning that property.

An age that a person or an insured has attained on a given date. For life insurance purposes, the age is based on either the nearest birthday or the last birthday, depending upon the practices of the insurance company involved.

A person empowered to act for another party; the chief administrative officer of a reciprocal insurance exchange who is given authority to act on the organization's behalf; also, a person authorized to execute a surety bond on behalf of an insurance company. See also reciprocal exchange.

Something that, although normally harmless, may nevertheless attract those who do not understand its uses and may cause injury. Typically, this doctrine applies to children who may be attracted to such things as swimming pools or animals that can cause them harm.

A premium adjusted at the end of the policy term to compensate for additional exposures. Audited contracts typically include liability and workers' compensation. See also deposit premium.

See admitted company.

A policy that provides coverage for owned and non-owned vehicles, including liability, damage to the auto, medical payments, and uninsured motorists coverage.

A common term for coverage provided automatically in property and liability policies (generally for a limited time and amount) for newly acquired property and changing interests and values.

A provision in a life insurance policy that states that if an insured fails to pay a premium by the end of the grace period, the amount of the premium due will be loaned to the insured automatically. However, the loan value of the policy must be sufficient to cover the loan plus interest. Generally, the insured must request that this clause be made a part of the policy at the time of application.

A provision in the policy that allows the insurance company to reduce monthly income disability benefits payable if the insured's total income benefits exceed either his current monthly earnings or his average monthly earnings during the two-year period immediately preceding the disability.

A clause that limits the liability, of the insurance company if the death of an insured is caused by certain types of aviation accidents.

A security deposit that guarantees the appearance of a defendant in court for trial, forfeited if the defendant fails to appear for trial; also the act of delivering goods to another to be held in trust for a special purpose.

A person one who has care, custody, or control of another's property, usually for repair, cleaning, processing, storage, or service.

This provides coverage for loss of or damage to property of others that is in the care, custody, or control of a bailee.

The owner of property who delivers it in trust to a bailee for a special purpose.

This provides protection for financial institutions and similar organizations against employee and non employee dishonesty.

The legal process that determines and oversees the distribution of an insolvent person's or company's assets to creditors. After distribution, the person or company is relieved of all liability to these creditors, even though some payments may have been less than the full obligation.

Insurance policy clause that stipulates that the bankruptcy or insolvency of the insured does not relieve the insurance company of any of its obligations under the policy.

A person(s) designated to receive a specified payment(s) in the event of the insured's death.

An improvement to property that puts it in a better condition than it was before the occupancy or loss. For example, a renter's redesign of an office space to accommodate his needs. See also improvements and betterments coverage.

A written or oral acknowledgment of insurance in force and evidence of acceptance of the applicant's offer to purchase the insurance, whether or not premium settlement has been reached and pending insurance of the policy.

This provides coverage against dishonesty; with money and securities coverage and forgery coverage, covering all employees.

A property or liability policy extending to more than one location, class of property or employee, without specifically naming the location, class or employee. See also specific insurance.

An employee dishonesty bond that covers all employees of the insured and provides protection for the insured from dishonest acts of those employees, without specifically naming the employees or their positions.

This provides hull physical damage and liability coverage for losses arising out of ownership, maintenance and use of a watercraft. See also yacht coverage.

Liability coverage that protects the insured from financial loss in the event he or she is legally liable to pay damages because of bodily injury, sickness, or disease, including required care, loss of services, and resulting death.

See equipment breakdown coverage.

A written agreement under which the surety agrees to pay, within the stated limits, for a financial loss caused to another (obligee) by the act or default of a third party (principal) or by some contingency over which the principal may have no control.

This failure to comply with terms or conditions of an insurance policy that may result in restricted coverage or void the policy.

This provides coverage against loss to a building in the course of construction and to temporary structures, materials, and supplies incidental to that construction. May also cover the builder's machinery and equipment while on the premises.

The forcible entry into or exit out of another premises with the intent to steal property. These must be visible signs of forced entry to exit in order for an incident to be considered a burglary.

This is insurance for commercial automobile risks against legal liability, damage to vehicles, medical expenses, loss from uninsured motorists, and personal injury protection or other equivalent no fault coverage. Coverage can be extended to owned, leases, and borrowed vehicles.

This provides coverage for loss of earnings that results when a business must shut down or curtail its operations after damage or destruction or property by an insured peril. Coverage applies for the length of time it takes to rebuild, repair, or replace the damaged or destroyed property so that business operations. can resume.

A package policy designed to provide property and liability coverage for retail, service, and other small to medium-sized businesses.

An attachment to a homeowners policy that provides liability coverage for business conducted at and away from residence.

This provides perils coverage on a dealer's stock of musical instruments or cameras, supplies, and materials. May extend to cover property in the insured's care, custody, or control.

The combination of the liability limits of bodily injury and property damage into a single limit of liability for both. Example: $25,000 per person/$50,000 per occurrence for bodily injury and $15,000 for property damage liability is the equivalent of $65,000 ($50,000 - $15,000) combined single limit of liability for BI and PD.

A type of fidelity bond with a lump sum limit that applies to each loss and collectively to all employees, no matter how many are involved in the loss.

This provides commercial liability coverage, including premises and operations, products and completed operations and other available liability options.

A common term for insurance that pertains to business, industrial, mercantile, or manufacturing risks. See also personal lines insurance.

A commercial package policy that combines commercial property, liability, and other insurance in a single package policy.

The compensation paid by an insurance company to an insurance producer for sale or service of a policy.

The business or individual that offers transportation services for hire to the public, such as by railroad, truck, bus, or taxi.

Law derived from common usage or from court decision.

The provisions common to all coverage parts under a single policy.

Any kind of financial remuneration, such as wages, salary, fees, commissions, or awards.

A state fund that writes insurance coverage, usually workers' compensation, in competition with private insurance companies.

This is a bodily injury and property damage legal liability insurance that covers finished operations by the insured business. See also products liability insurance.

Provides auto coverage for theft, vandalism, fire and collision with a missile, falling object, and wild or domestic animal. See also collision.

Commonly called the 3-D policy, it is equivalent to Coverage C or the crime insurance policy.

Insurance that is required by law.

The deliberate withholding of material facts that would affect the validity of an insurance policy or a claim under the policy.

Two or more insurance policies that cover the same property at the same location under the same terms and conditions, with the same types of coverage. See also other insurance provision.

The part of an insurance policy that details the rights and duties of the insured and the insurance company in the policy.

A commercial package policy designed to provide property and liability coverage for a condominium owners association.

A commercial property policy for a unit owner of a nonresidential condominium or cooperative unit; an HO-6 homeowners form designed for owners of condominiums, cooperatives, or townhouses.

This provides indirect loss coverage for boiler and machinery risks that indemnifies the insured both for actual loss of specified property as well as the liability for others' loss owing to the spoilage that resulted from a lack of power, light, hear, steam, or refrigeration caused by an accident to an insured boiler or machinery.

The indirect loss caused by an insured peril that occurs after and as a result of other loss, for example, the loss of profits when a business is damaged by fire and consequently must temporarily close, or the loss of perishable items that freeze when an electrical failure damages the heating system in a building.

The inducement to complete a contract, for example, the premium paid by the insured and the promise to pay made by the insurer.

The corrupt or unlawful collusion or agreement between two or more parties to do an unlawful act by concerted action or to do a lawful act by unlawful means.

A partial loss to property of a sufficient amount to make the cost of salvage or repair equal to or more than the value of the property.

This provides coverage for loss due to the destruction of the undamaged portion of a building or structure that is required by law or ordinance when damage exceeds a percentage of a property value.

The provides protection for the commercial risk against loss of earnings when fire or other insured peril damages a business that is not owned, operated or controlled by the insured, such as those that supply materials and services needed by the insured for the conduct of business.

See indirect loss.

An agreement (offer and acceptance) between two parties who have legal capacity to contract that involves valuable consideration and that does not violate any statue or other legal rule.

A contract prepared by one party, without negotiation with the other, that can either be accepted or rejected by the other party.

A legal and binding unilateral contract in which an insurance company agrees to indemnify an insured for losses, provide other benefits, or render services to or on behalf of the insured.

This provides physical damage coverage for equipment used by contractors, such as bulldozers or cranes, that may be located at a temporary or permanent job site.

This provides coverage against legal liability for bodily injury or property damage assumed by the insured under a contract.

The signature of a licensed insurance producer or representative of an insurance company necessary in certain states to validate a contract.

A guarantee against specific losses provided under the terms of an insurance policy; the amount and extent of insurance afforded under a contract of insurance or insurance contract.

This provides protection, up to a specific limit, for legal liability incurred because of theft or unauthorized use of credit cards issued to the insured as well as loss to the insured caused by forgery or accepting counterfeit money in good faith.

This provides coverage for financial loss resulting from hail damage to growing crops. This is a federally sponsored program.

The amount claimed by or awarded to an injured party as compensation for liability owing to bodily injury or property damage.

The part of an insurance policy that contains the applicant's representations and other information pertinent to the risk, on the basis of which the policy is issued.

Policy provision that requires the insured to pay a specific amount or percentage of a loss and the insurance company to pay covered losses in excess of that amount.

This is insurance that covers the cost of destroying a building or structure that has been partially damaged.

An advance, estimated premium paid at the inception of a policy that is adjusted periodically (e.g., monthly or annually), on the basis or actual exposures.

A decrease in value of property due to use, age, obsolescence, wear and tear, deterioration, etc.

This provides protection for reasonable expenses incurred by the insured for removal or debris after a loss caused by a covered peril.

This provides coverage that provides broad protection for damage to property. This form usually excludes fire and other perils covered by personal and commercial property insurance policies, bus includes other perils such as earthquake and flood.

A loss resulting immediately and directly from an insured hazard.

An insurance company that sells its policies directly to insureds through insurance producers who are salaried employees or producers commissioned by that company exclusively.

The period after an insurance contract or bond is terminated within which a loss that occurred during the policy period must be discovered in order for the loss to be covered by the policy or bond.

The act of charging different rates to groups or individuals who represent the same risk, usually on the basis of age, sex, national origin, race, location, or occupations.

An insurance company that writes business in the state or province of its incorporation or charter.

A series of forms providing basic, broad, or special form coverage for dwelling buildings and contents or coverage for household contents only. Unusually written for owned residential property that is rented to others.

The premium paid for the period of time a policy is in effect. See also unearned premium; audit premium.

Any sinking, shifting, or rising of land, including earthquake, landslide, or mudslide.

The date on which a policy or bond is put in force and protection is furnished. Also called the inception date.

The act of appropriating fraudulently and for one's own use money or other property entrusted to one's care or control.

This provides coverage for an employer against third-party liability claims that result from an employee's injuries. Usually part of a workers' compensation policy.

A written amendment attached to a policy, with the insurance company's approval, that stipulates changes to the policy's terms.

This provides coverage for unintentional bodily injury and property damage that arises out of the discharge, release, dispersal, or escape of smoke, vapors, soot, fumes, acid, toxic chemicals, or irritants. Also provides coverage for the accidental discharge of pollutants or contaminants into or upon land, atmosphere, or any body or water.

This provides coverage for accidental loss arising from the operation of a boiler, pressure, mechanical and electrical equipment, and machinery. Such policies may include coverage for loss to the boiler and machinery itself, for liability from damage done to other property and for loss from business interruption. Formerly called boiler and machinery coverage.

This is professional liability insurance primarily intended for non-medical professionals that pays for losses or for defense of malpractice suits. See also malpractice.

The legal doctrine that prevents the denial of a fact previously admitted through action or conduct.

This provides coverage against loss in excess or a stated amount or in excess of coverage provided under another insurance contract.

A provision in an insurance policy that excludes certain risks or otherwise limits the scope of coverage; certain causes and conditions listed in the policy that are not covered.

The cost of soliciting, underwriting, and servicing an insurance policy by insurer, expressed as a percentage or written premiums.

A factor applied to an insurance policy, usually workers' compensation, that modifies the premium on the basis of the policyholder's loss experience.

A modification of the insurance rate based on the loss experience of an individual insured.

The date on which coverage under a policy terminates.

The potential for loss to an item of property or to the assets of an individual, family, firm, or organization; the measure of risk to the insurer.

The authority given to a producer or agency directly by means of the agency agreement or contract.

Additional, broader protection against loss or damage to property offered in conjunction with fire insurance that usually covers the perils of windstorm, hail, smoke, explosion, riot, riot attending a strike, civil commotion, vehicles, and aircraft.

The time, under a commercial claims-made liability contract, after a policy has expired, during which the insured can still make a claim for loss occurring within the policy period.

This is coverage that pays for the necessary extra expenses, over and above normal expenses, to keep a business operating during the time it takes to rebuild, repair, or replace the damaged or destroyed property after a loss.

A person related to the insured by blood, marriage, or adoption who is a resident of the named insured's household, including a ward or foster child.

This is a package policy that provides coverage for farm dwellings and their contents, personal liability, and optional coverages for farm personal property, structures, livestock, and mobile agricultural equipment.

A bond that reimburses an employer for losses caused by dishonest acts of employees, such as embezzlement, fraud, forgery, or theft.

A court bond executed on behalf of a person appointed by a court to a position or trust that guarantees the performance of statutory duties and proper accounting.

The responsibility (usually financial) that someones owes to anther because of funds or other items held in trust.

See hostile fire.

This provides protection in connection with fire insurance to pay (up to a specified limit of liability) fire department charges incurred if the fire department is called to save or protect insured property.

This is coverage for losses to insured property that results from fire of lightning, as well as the result from fire or lightning, as well as the resultant damage caused by smoke and water.

This provides protection against legal liability that arises from a fire started by the negligence of the insured or an employee of the insured that damages property occupied by or rented to the insured.

A loss paid by an insurance company to its own policyholder.

An insurance policy that provides coverage for mobile property regardless of location.

An insurance company that operates in a state other than the one in which it is incorporated or chartered.

The criminal act of falsely and fraudulently making or altering a document with intent to deprive others of some right, interest, or property by deceit.

An unintended accident.

An intentional concealment or false representation of a material fact that intends to take something of value or to force the surrender of a right. Fraud can be determined only by a court of appropriate jurisdiction.

This provides broad, open perils coverage on a furrier's stock of furs, including furs that have been sold to customers, but none yet delivered.

A policy that provides coverage for loss or damage to a customer's furs while in the care, custody, or control of a furrier for storage, repair, or cleaning.

This provides special protection for firms in the automobile business that offers bodily injury and property damage for premises and operations, products and completed operations, medical payments, ownership, operation, and use of owned an non-owned autos and garage-keeper coverage. It protects against loss that results from damage by insured perils to customers' vehicles in the custody of the insured for reasons such as safekeeping, storage, service, or repair.

This provides collision and comprehensive (other than collision) coverage for losses to non-owned vehicles left in the insured's care, custody, or control.

This provides protection against legal liability for commercial risks arising from ownership, maintenance, or use or business premises, defects in manufactured products, and completed operations. See also commercial general liability.

A specific situation or condition that increases the probability or severity of a loss.

A contractual agreement, usually written, whereby one party assumes legal liability on behalf of the other.

A series of package policies for occupants of residential property that combines insurance for dwellings and household contents with personal liability insurance.

A fire that produces a visible spark, flame, or glow and leaves the area where it was intended to be kept.

Authority that, although it is not expressed in a contract (express authority), is necessary to perform the duties expressly authorized.

Protection for lessees and tenants against loss to additions or changes made b them at their own cost that enhance the value of the property they occupy.

See effective date.

A written lease of the premises; also and easement agreement, except in connection with construction or demolition operations on or adjacent to a railroad; a municipality indemnification agreement, sidetrack agreement, or elevator maintenance agreement.

This provides protection for the portion of a loss owning to changes in local building code specifications that requires modification when rebuilding after a covered loss. See also contingent liability from operation of building laws; demolition cost insurance.

To restore in whole or in part by payment, repair, or replacement the situation of one who has suffered a loss.

The payment of an amount of money to offset all or part of an insured loss.

A contractor who performs work for another but is not an employee f the party for whom the work is performed.

A loss that results from a peril, but is not directly and immediately caused by it.

An endorsement to a property insurance policy that increases the amount of coverage by a stated percentage at specified times to counteract the effects of increased building costs.

A characteristic in property itself that causes it to depreciate, spoil, break, become defective, disintegrate, or destroy itself.

This provides insurance protection for cargo and shipments that do not involve ocean transit. In addition, coverage is provided for bridges and tunnels, as well as jewels, furs, collectibles, and other items that may not remain at a single location.

This primarily insures a contractor's or owner's interests in machinery, equipment, and supplies while they are in transit to the place of installation and during installation.

The interest from which monetary loss will result if the peril insured against occurs; possibility of financial loss that can be protected against by insurance.

A contractual means of transferring the risk of loss to an entity (insurer) that pools similar exposures.

See insurer.

An organization that develops and provide standardized and state-specific forms, rates, and inspections for its members.

Person for whom insurance is provided. See also assured.

An entity that grants insurance.

A clause in a policy that broadly defines and describes the scope of the coverage provided and its limits of indemnification.

This provides protection for the owner-occupant of a residential mobile home; similar to homeowners broad form (HO-2) coverage.

The act of throwing a ship's cargo overboard of cargo from a ship to prevent further damage or sinking.

This provides broad, open perils coverage for a jeweler's goods and the goods of others while they are in the insured's care, custody, or control.

The termination of a policy terminated because of the nonpayment of premiums.

The unlawful removal of personal property with the intent to deprive the rightful owner of it.

A statistical principle stating that the larger the number of observations, the more accurate and reliable a prediction will be.

The concept that the purpose of a contract must be legal, moral, and in the public good. See also contract.

One to whom a lease is granted, a tenant.

One who grants a lease; a landlord.

The condition of being bound by law or contract to do something that may be enforced in the courts; obligation, usually financial; probable cost of meeting an obligation.

A clause in a policy providing that if, during the policy period, the insurance company adopts a change in the contract or there is a change in law that extends or broadens coverage, the insured will receive the benefit of this change in the same manner as if the endorsement had been made without paying an increased premium until renewal.

The maximum amount an insurance company is willing to insure under a given form or contract or any particular risk; the maximum amount payable for a given loss, occurrence, or aggregate limit.

A form that provides blanket or scheduled coverage on a named perils basis for certain types of livestock.

An association of syndicates who share similar interests that insures specialized risks. Each syndicate is made up of individual investors who become financially responsible for any incurred loss. Each person is responsible for only the share of the rick that he or she assumes.

The basis of a claim for indemnity under the provisions of an insurance policy. A loss is measured in terms of the reduced value of the property, the amount of medical and other related expenses, or the amount of the claim made against an insured.

An occurrence of professional misconduct, negligence, or lack or ordinary skill when performing a professional act that makes a person liable for damages.

A form a professional liability insurance that pays for losses or for defense of suits malpractice. See also errors and omissions insurance.

The amount a willing seller will accept for his or her property from a willing buyer. See also actual cash value.

Information required to make an insurance underwriting decision; statement concerning an action or entity of such importance that disclosure of it would alter an underwriting decision or loss settlement.

A professional liability form specifically designed for doctors, nurses, medical assistants, hospitals, or clinics.

This extended reporting period, usually 60 days, that allows the insured to report any possible claim to an insurer after the expiration of a claims-made contract. See also claims-made.

A false statement of a material fact known at the time the statement was made.

This provides blanket or scheduled open perils coverage for ranch and form owners on farm machinery and equipment.

This provides broad, open perils coverage of commercial risks associated with money and securities both on and off premises.

The effects that personal reputation, character, associates, personal living habits, financial responsibility, criminal history, and environment have on the risk to be insured.

The effects that indifference concerning loss has on the risk to be insured.

A provision in or attached to fire policies covering mortgaged property that defines the mortgagee's rights and privileges under the policy.

One who holds a mortgage loan on property.

This provides coverage (1) against direct loss or damage to an insured trucker's goods while they are in transit on the insured's own trucks and (2) against the legal liability of an individual or business engaged in transporting the property of others for hire.

An insurance policy that provides coverage for several different causes of loss.

An insurance company, insurance agency or insurance producer in the business of selling and servicing more than one type of insurance, most often property and casualty insurance and life insurance.

An insurance company that is owned by its policyholders and managed by a board of directors.

A fidelity bond that covers only the employees named on the bond.

The person specifically designated by name as the insured in a policy. See also insured.

A policy that specifies the perils insured against. See also open perils.

An association of state insurance commissioners active in the analysis of insurance regulations and in the formation and recommendation of uniform and model regulations and legislation.

A federal program established through the Housing and Urban Development (HUD) Act of 1968 to make flood insurance available to individuals and businesses in those flood-prone communities that adopt certain land-use and flood-loss control measures.

A guideline for classifying marine, inland marine, or transportation insurance; includes imports, exports, domestic shipments, bridges, tunnels, and other means of transportation and communication and personal property and commercial property floater risks.

The failure to use all reasonable means to save and preserve property before, during, and after a loss or whenever property is threatened.

The failure to act as a reasonable and prudent person would (under the same circumstances and with the same knowledge) to prevent an accident or injury.

Insurance designed to replace or limit tort liability from automobile accidents. A state's financial responsibility laws often require liability and limited medical, rehabilitation, and wage loss reimbursement for any person injured in an automobile accident.

The situation in which a number of insurance policies that are intended to cover the same property against the same hazard(s) are not identical as to the extent of coverage or the interest insured.

An automobile that is borrowed or rented from others or is owned by an employee of the insured.

The determination by the insurer or insured not to continue coverage after the anniversary date of the contract. See also cancellation.

An insurance producer licensed in a state in which he does not reside.

A policy that relieves or reduces insurance company liability for loss caused by specific types of nuclear incidents.

A disease or condition of health not caused by accident but by exposure to conditions arising out of or in the course of one's employment. In many states, this includes occupational-related stress.

A federal law, enacted in 1971, that mandated specific health and safety standards in places of employment.

A happening that takes some length of time; a series of accidents, including exposure to injurious conditions, that can be connected through common cause. See also accident.

A policy that provides liability coverage for injury or loss regardless of when the claim is actually made as long as it occurred during the policy period.

this provides protection against loss to insured ship and its cargo, machinery, equipment, and merchandise in transit; generally includes legal liability in the event of a collision with another ship and liability for injuries or damage to other property.

A common term for broad property or liability insurance coverage against risks or direct loss that is subject to specific exclusions or limitations listed in the policy. Formerly referred to as "all risk".

Usually attached to a homeowners or commercial property form (HO or CPP). This provides protection for the case of demolition, increased costs of construction or the value of undamaged property if these actions are required by a governmental authority because of a covered loss.

An employer's payroll to all employees except officers, executives, department managers, employees under contract, and other key employees.

A provision in a policy that states what is to be done when another contract of insurance provides the same coverage or covers essentially that same property.

This insured the legal liability of contractors and other persons for the negligent acts of independent contractors engaged by them and, in some cases, for their own negligent supervision of the work performed.

This is business insurance designed to protect against liability for bodily injury or property damage to others arising from the ownership, maintenance, or use of premises owned or occupied by the insured.

Insurance policies that offer several coverages included in one contract.

A provision that stipulates that the loss of one item of a pair or set does not represent the loss of the entire set. Settlement of the claim is usually based on the difference in the value of the set before and after the loss.

A loss that does not completely destroy insured property or exhaust the insurance limits applying to that property.

A surety bond that guarantees that a contract will be completed per the agreed specification.

An event insured against; the cause of a possible loss.

This provides protection for liability, medical payments, and damage to the automobile for individuals and married couples and their owned and nonowned vehicles.

This provides coverage for libel, slander, invasion of privacy, and other international torts.

In a no-fault state, PIP provides first-party coverage for injuries suffered by the insured in an automobile accident. See also no-fault automobile insurance.

This provides protection against legal liability arising in connection with personal, non-business activities both on and off insured premises.

This provides coverage of risks of an individual, personal, or non-business nature.

All property, other than real property, owned or used by an insured.

This is a broad, open perils policy for personal property regardless of its location. It is written as a separate policy or as an endorsement to a homeowners policy.

A hazard arising out of the use, condition, or occupancy of the insured property.

The party to a lawsuit who brings charges against another party, the defendant.

The insurance contract and all attached endorsements.

The length of time during which the policy contract affords protection; also called the policy term.

The part of a CGL contract that provides limited liability coverage in the event of necessary pollution clean-ups.

A group of insurance companies that join together to share certain risks, such as aviation liability, on an agreed-upon basis.

A fidelity bond that covers losses due to employee dishonesty when committed by persons who occupy certain listed job descriptions.

This provides business liability protection for occurrences at the business location or elsewhere due to its operations.

A commercial crime form that provides coverage for burglary or attempted burglary.

The designated amount owed by the insured to the insurance company in order to keep the contract in force.

A person whose obligations are guaranteed under a bond (also called the obligor); the applicant for or subject of insurance; the one (usually the insurer) from whom an insurance producer derives authority.

A property insurance clause that makes each company insuring the same interest in a property liable according to the proportion that its insurance bears to the total amount of insurance on the property.

The termination of a policy or bond with a return of premium charged for the exact time the protection was in force equal to the ratio of the total premium to the total policy period. See also short rate cancellation.

A person licensed by the state insurance authority to sell insurance products. The producer represents the insurance company in all transactions.

This provides protection against legal liability for bodily injury or property damage arising after goods and products have been manufactured, handles, sold, or distributed. It includes products that have left the insured's possession and premises or, in the case of food, when it is given to a customer. See also completed operations liability insurance.

A formal document that contains the signed and sworn statement of the insured in regard to the loss for which a claim has been filed.

This is liability coverage that provides protection in the event of loss of property, including the loss of use, owned by someone other than the insured.

The written terms or conditions of a policy.

The immediate cause that in a natural and continuous sequence, unbroken by any intervening efficient cause, brings about the loss and without which the loss would not have happened.

The uncertainty as the whether loss will occur; offers no chance for gain. Insurance may be provided against many types of pure risk.

Cost of a given unit of insurance.

Land and generally whatever is permanently erected or growing upon or affixed to the land; property not of a personal movable nature. See also personal property.

An association of individuals known as subscribers, managed by an attorney-in-fact, who agree to exchange insurance risks.

The act of sharing or spreading a risk that is too large for one insurer by transferring part of the risk to a reinsurer. The insurance company obtaining the reinsurance is called the ceding company; the insurance company issuing reinsurance is called the reinsurer.

A discharge from further liability under an insurance policy.

This provides coverage for damage that results from property removed for its own protection from premises endangered by an insured peril.

The continuation of coverage under an insurance policy beyond its original form.

This provides protection against loss or rental value when a building is made untenanted because of damage or destruction by an insured peril; the insured may be either the owner of the building or a tenant.

The actual cost of replacing property without a deduction for depreciation. See also actual cash value.

This is insurance written to provide for fluctuating values of property that requires payment of an advance premium, value reports made by the insured at specific times, and the adjustment of earned premium.

A statement of material fact that is reasonably accepted and substantially true.

A general rule in law that principal or employer is liable for the acts of a producer or representative performed on behalf of the principal's business.

the amount of unused premium owed to the insured if a policy is canceled or its face amount or rate is reduced.

The uncertainty regarding loss; a term indication the person or property insured. See also pure risk; speculative risk.

The attempt to identify, measure, control and translate pure risk and insurance problems into significant business language in order to protect future income and reduce long-range costs against accidental or unintended loss. The risk manager controls risk by accepting, reducing, elimination, or transferring it.

The unlawful taking or others' personal property by violence or threat of violence; a hold-up.

This provides coverage for commercial risks to protect against loss of money, securities, and other property as a result of forced entry into a safe or vault.

The damaged property recovered and sold by an insurance company to reduce its financial loss.

A merit system whereby a standard risk is established for each classification and measured by the manual rate. If the risk is better than average, credit factors are applied to the manual rate; if the risk does not meet the standard, debit factors are applied.

Provided by a noninsurance company that has the financial ability to retain the risk of loss without the use of an insurance policy.

The amount the insured must satisfy if a loss is covered by an umbrella policy but not by an underlying insurance.

The termination of a policy or bond by the insured before the end of the policy period, with the earned premium plus administrative expenses retained by the insurance company.

The uncertainty regarding loss and gain. Speculative risks may not be insured against.

The practice of separating Bodily Injury and property damage into distinct limits of liability (for example, $50,000 BI and $15,000 PD). See also combined single limit.

The underwriting principles that require the insurance company to spread its risks to as many geographic locations as possible.

This provides protection against loss caused by accidental discharge of water or other substances from an automatic fire protective system, including direct loss caused by collapse or fall of tanks forming part of the system.

This generally refers to the 1943 New York 165-line standard form, it was used in most states with statutory modifications. Provided protection against direct loss by fire, lightning, and removal.

An amendment to the valuation provision of a property insurance policy that provides a maximum amount of payment of any loss. it is typically used in automobile insurance for older, classic, or antique automobiles.

An insurance company owned by its stockholders. Also known as capital company or a capital-stock company.

The act of assigning or substituting the rights of one party to another in collecting a debt or claim, as an insurance company is assigned an insured's rights of recovery from a third party who was caused a loss.

The party under a bond who is legally liable for the debt, default, or failure of the principle to the bond.

See extended reporting period.

The period of time for which a policy or bond is written.

Any illegal act of taking or stealing, or attempting to take or steal, someone else's property, including such crimes as larceny, burglary, and robbery.

An insurance claim paid by an insurance company to someone other than their own policy-holder. See also first-party claim.

A common term for insurance protection against indirect loss resulting from damage to insured property, such as business interruption, leasehold interest, loss of rents, and extra expense insurance.

A civil wrong or injury for which legal action may be taken; for example, negligence or assault.

This policy protects individuals and organizations in the business of transporting property for hire; it offers bodily injury and property damage liability, physical damage coverages, and trailer interchange coverage for owned and nonowned trailers.

This provides broadened coverage and higher limits of liability for businesses, organizations, and individuals. Supplements basic liability coverage. See also excess insurance.

The condition of having coverage for less than the percentage of value required to satisfy the coinsurance clause of a policy.

This is auto coverage that provides protection in the event an insured is involved in an accident caused by another who is carrying insurance coverage lower than the amount of the damages and lower than the claimant's Underinsured Motorists coverage.

The amount of insurance required to be in effect before the next higher excess layer of insurance attaches.

The process of researching, evaluating, and determining the insurability risk.

The portion of an insurance premium that has not been used to provide protection to an insured. See also earned premium.

This is auto coverage that provides protection in the event the insured is involved in an accident where the other party is at fault, but not insured. See also underinsured motorist.

The insured property is not currently being used but the occupant intends to return.

A requirement in a contract that there be no fraud, concealment, or misrepresentation between the contracting parties.

Property that does not contain sufficient furnishings to support its intended occupancy or use.

This provides protection against loss of papers, document, or other means of storing information that must recreated in the event of a loss.

The provision in a policy that defines the basis for establishing the amount to be paid in the event of a loss to insured property.

This is a policy in which the value of the property insured and amount to be paid in case of total loss are determined at policy inception rather than at the time of the loss.

Willful and malicious physical damage to or destruction of property.

The act of canceling a contract back to the original inception date. Effectively, the contract is rendered null, having no legal force or binding effect.

A policy contract that can be made void at the option of one or more parties to the agreement.

A literal promise and guarantee, either expressed or implied (i.e., concerning the condition of property to be insured), made for the purpose of risk evaluation by the insurance company; if found to be untrue, may provide a basis for voiding the policy.

This provides benefits to a worker or the worker's dependents for injury, disability, or disease contracted by the worker in the course of his or her employment.

This provides coverage for physical damage (Hull) and liability (Protection and Indemnity) arising out of the use of personal watercraft.