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Insurance 101A
Insurance Abb
| Term | Definition |
|---|---|
| Admitted | Company’s that have admitted forms are licensed in the specific state, have filed their forms, and generally have stricter rate and coverage requirements. These Companies are backed by the Guarantee Fund. |
| Agency | dept w/in Hx maintains the Broker Management System, and all functions in relation to brokers, like providing and reviewing apps for potential broker relat'ships, updating licenses,adding brokers to Magic. keep any licenses held by Hx and Hx employees. |
| Allied Healthcare (AHC) | Professional Liability and general liability for insureds in the healthcare sector |
| Application | Insureds complete this for every piece of insurance they have coverage for. The info contained provides the insurance carrier with details on what type of risk the potential insured is, and is used to make decisions in providing quotes and policies. |
| Architects & Engineers (A&E) | Professional Liability designed to protect architects and engineers from negligence and errors & omissions |
| Attorney-In-Fact Office (AIF) | Lloyd’s can write policies on admitted basis and non-admitted in the state of Illinois. This dual platform requires more reporting implications. Every policy bound in the state of Illinois must be countersigned by Attorney-In-Fact prior to issuance. |
| Binder | Temporary insurance contract that provides proof of coverage until the policy is issued. |
| Bordereau | A detailed memorandum or report containing a list of documents or accounts. |
| Retail Broker | represents the insured and conducts business directly with the insurance carrier |
| Wholesale Broker | the ‘middle man’ between the insurance carrier and the retail agent/broker, and do not have any contact with the insured. They tend to have access to markets that retail agents/brokers do not. |
| Broker of Record (BOR) | A letter on an insured’s letterhead, signed by an executive of the insured’s organization, authorizing a specific broker to conduct business on their behalf. This is used in a situation where more than one brokerage is marketing a line of coverage. |
| Business Interruption/Income (BI) | Coverage for loss of revenue/profit following damage to an insured’s property |
| Catastrophe Model (CAT Model) | Catastrophe modeling is the process of using computer processed calculations estimating the losses that could be sustained by a portfolio of properties due to a catastrophic event such as a hurricane or earthquake. |
| Certificate | This word can be interchangeable with a couple of meanings. Our admitted products call the Declarations page a Certificate. |
| Certificate of Insurance/Liability | This can sometimes be referred to only as a ‘Certificate’. This is proof of insurance to a third party. |
| Claims-Made Form | A policy that is Claims-Made is triggered when a claim is made and reported within the current policy period. These forms are designed to provide prior acts (indicated using a retroactive date) coverage during the current policy. |
| Commercial Lines | This type of insurance is written for businesses, rather than individuals. |
| Commission | Fee paid to broker as a percentage of the policy premium. |
| Construction | Insures against physical loss of or damage to insured property necessary for the insured project. |
| Declarations Page (Dec Page/Certificate) | the portion of an insurance policy provides the who, what, and how much of what is being insured. Typically incl: Insured’s Name, Address, policy period dates, LOL,RDI, operations of the insured entity, forms included in rest of the policy etc. |
| Deductible | A deductible (sometimes referred to as ‘Retention’) is the amount an insured is required to pay (as indicated in their policy) in the event they have a loss. |
| Self Insured Retention (SIR) | the amount retained by the insured in the event they have a loss (as indicated in their policy). similar to a DED, but money paid out is paid directly to the collector (claimant, counsel etc.) not insurance company (as it would be with a deductible). |
| Directors & Officers (Management Liability, D&O) | This type of liability insurance provides coverage for directors and officers of organizations against liability claims arising out of their errors in judgement, breeches of duty, and wrongful acts all in relation to their services for the organization. |
| Employment Practices Liability (EPLI) | This type of liability insurance provides coverage for employers against claims brought upon by employees for such instances as harassment or discrimination etc. |
| Endorsements | This portion of an insurance policy are forms that change the policy form. They can either enhance or restrict (also known as exclusions) coverage. Endorsements can be included when a policy is first issued, or added during the policy term. |
| Equine Animal Mortality Insurance | Provides personal insurance for an insured’s horse(s). |
| Errors & Omissions (E&O) | This is a type of professional liability insurance that provides coverage for losses due to errors or oversights while performing services for others. |
| Excess Policy | Type of policy purchased bc insured needs high limits and their insurance carrier can't/won'tprovide what they are looking for. For every policy, there is always a primary policy. The primary policy will always provide coverage first to an insured. |
| Exposure | Areas of possible loss. |
| Extended Reporting Period (ERP or Tail) | This is used in conjunction with claims-made policies. An ERP provides an additional amount of time for which a claim can be made, and still be covered under the expired policy. (Refer ‘Claims-Made Form’ for how claims are covered) |
| Flat Cancellation | All premium is returned to the Insured as if the policy did not happen |
| General Liability (GL) | type of insurance protects businesses from a wide variety of liability exposures including liability arising from accidents resulting from the business’ ops or premises, products sold, operations completed by the insured, and contractual liability. |
| Inland Marine | These policies provide property coverage to mobile equipment. At Hiscox, we focus primarily on vehicular and rail transportation, construction and mining operations, leasing and warehousing. |
| Insurance Services Office Inc (ISO) | This organization collects statistical data, disseminates rating information, and develops standard policy forms. ISO forms are common with many admitted carriers. |
| Insured | Every policy will include who is considered an insured |
| Named Insured | Any person, firm, or organization that is specifically designated by name as an insured. The first named insured is responsible for payment of the policy. |
| Additional Named Insured | Any person, firm, or organization that is added after a policy is issued as an insured with the same rights as the Named Insured; or any other person, firm, or organization other than the first named insured. |
| Additional Insured | Any person, firm, or organization that is not automatically included as an insured, but for whom requires the status. This is commonly used when contractual relationships occur. |
| Kidnap & Ransom (K&R) | Provides coverage for serious security crisis’ impacting businesses and individuals and families. |
| Lapse | This occurs when insurance coverage ceases and a new policy does not start immediately following the end of the prior policy. |
| Limits of Liability | This is the amount of coverage available (measured in dollars) for a specific policy or extension within a policy. |
| Each claim | This is the maximum limit of liability that an insurance policy will pay for any ONE claim within a policy period. |
| Aggregate | This is the maximum limit of liability that an insurance policy will pay out for ALL claims within a policy period. |
| Lloyd’s of London | This is the society of individual and corporate underwriting members that insure and reinsure risks as members of one or more syndicates. |
| Loss History (Loss Runs, Loss Experience) | This is a record of an insured’s claim experience. This is usually provided by coverage type (lines of business). |
| a. Value Date | This is the date the loss run report was generated. |
| Magic | Third party software that Hiscox USA uses to transact all business, and store all documents. This program is an intricate part of the day-to-day operations. |
| Managing General Agent | This is an intermediary for an insurance company. They usually provide underwriting and administrative services on behalf of the insurance company and work directly with agents. |
| Minimum Earned Premium | The amount of premium actually earned even if the policy is immediately cancelled. This is represented by a percentage of the policy premium. |
| Miscellaneous Professional Liability (MPL) | E&O coverage to a wide range of professions. |
| Non-Admitted | Company’s also referred to as E&S (Excess & Surplus) or Surplus lines. These companies follow the surplus provisions for the specific state, are not backed by the guarantee fund, and will always have a tax and/or fee owed to the state |
| Occurrence Form | A policy that is on an occurrence form will respond to a claim that is reported at any time, so long as the services that triggered the claim were during that policy period. |
| Peril | The cause of a possible loss |
| Personal Lines | This type of insurance is written for individuals or families, rather than businesses. |
| Premium | The amount of money charged to an insured for an insurance policy. |
| Prior Acts Coverage | This is measured using a retroactive date. This provides coverage to claims based upon or arising from any wrongful act which occurred from the retroactive date forward. |
| Policy Form/Wording | This portion of an insurance policy is the contract wording that the insurance company is bound to. |
| Premium Payment Warranty (PPM) | Terms of which the policy premium must be paid by to avoid automatic termination of the policy. |
| Property | Protects physical assets of a business against unexpected catastrophe or misfortune. |
| Property & Casualty (P&C) | This is a broad term to describe types of coverages that a person may be licensed to sell, or a company may offer. Property is for physical damage, and casualty is for liability. |
| Pro-Rata Cancellation | The unearned premium of a policy is the amount returned to the insured. |
| Registered Professional Liability Underwriter (RPLU) | A designation used and sought after by insurance companies. |
| Reinsurance | This is insurance that insurance carriers purchase for their own protection. |
| Retroactive Date | A specific date used in claims-made polices that excludes coverage for incidents occuring prior to that date, regardless if that date falls within the policy period. |
| Short-Rate Cancellation | This cancellation is considered to be a pro-rata cancellation with a penalty. This is used usually when an insured terminates the policy. |
| Statement of Values | Spreadsheet outlining property and their value |
| Subjectivities/Contingencies | These are outstanding items that must be satisfactorily reviewed by the Underwriter before a quote or policy terms can stand firm. |
| Surplus Lines | this term relates to whether an insurance company is admitted or non-admitted in a specific state for a specific product. |
| Technology, Media, & Telecommunication (TMT) | umbrella Hiscox uses to categorize coverages that are provided in these areas.Coverage provided for E&O claims for tech profs and multimedia prof liability |
| Terrorism | This type of insurance provides businesses with coverage for damage as a result of terrorism. |
| Total Insured Value | This is a property term which is the sum of all the values an insured is insuring including property, businss income, and any other covered property interests. |
| TRIA (Terrorism Risk Insurance Act) | All commercial insurers are required to offer this coverage to insureds, and would be reimbursed by the federal government for any claims that are paid out. The Act guarantees insurance coverage against acts of international terrorism. |
| TRIPRA (Terrorism Risk Insurance Program Reauthorization Act) | This is the current, and long-term terrorism insurance solution signed into law in 2007. The new Act makes one notable change from TRIA- broadens terrorism to include both domestic and foreign attacks. |
| Underwriter (UW) | An employee of the insurance carrier who is trained in evaluating risks and determining rates and coverages. |
| Underwriter/Underwriting Assistant (UA) | Administer day-to-day activities to assist the underwriters by logging submissions, creating quotes, fielding correspondence, issuing policies and endorsements, and maintaining each overall file |
| Warranty Letter (No Known Loss Letter) | This letter always on the insured’s letterhead signed by an executive of the insured’s company that the insured does not know of any current claims against them or any actions that could give rise to a claim. This is usually accompanied by a date range. |
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ecren
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