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Casualty Insurance
Insurance Licensing
| Term | Definition |
|---|---|
| Blanket Position Bond | Fidelity bond that covers losses arising from the dishonesty of one or more employees acting separately or in collusion;provides a single limit of liability applicable to each employee involved in a loss. |
| Burglary | The taking of property by a person unlawfully entering or leaving the premises as evidenced by visible signs of forced entry or exit. |
| Certificate of Insurance | Written for that verifies a policy has been written;provides a summary of the coverage provided under the policy. |
| Claims-Made Form | CGL coverage form that pays off bodily injury (BI) or property damage (PD) losses for which a claim was first made against the insured during the policy of period. |
| Collision | Type of physical damage coverage that covers loss that occurs when the insured auto strikes another object or vehicle;may also include upset or overturn of the insured auto. |
| Comparative Negligence | Law that allows an injured party to collect from another party for a loss, even when the injured party contributed to her own loss. Damages are reduced to the extent of the injured party's negligence. |
| Compensatory Damages | Damages that reimburse an injured party for losses that were actually sustained. |
| Completed Operations | Coverage in the CGL policy that covers work that has been completed or finished and put to its intended use. |
| Comprehensive Coverage | Found in an auto policy, a broad physical damage coverage that covers all property losses except collision and those perils or property that are specifically excluded; also called Other Than Collision (OTC). |
| Concealment | The withholding of a material fact involved in the contract on which the insurer relies. |
| Contribution by Equal Shares | Insurance condition found in liability policies;it calls for all insurers to contribute equally up to the limit of the of the policy having the smallest limit, company stops paying,other companies share in remainder of loss until loss is paid in full. |
| Court Bond | A type of surety bond used to settle legal arguments that do not involve monetary damages. |
| Custodian | An insured, partner, or employee who had care and custody of insured property within the premises. |
| Defense Costs | Legal expenses incurred by the insurer to defend suits brought against insured, these costs are paid in addition to payments for BI or PD claims. |
| Direct Writer | Insurance marketing system where the company's agents are also employees of the company. |
| Directors and Officers (D&O) Liability Insurance | Type of errors and omissions policy written for the board of directors or its officers of the company, who may be sued as individuals by shareholders. |
| Discovery Form | Commercial crime form that covers losses that are sustained at any time and discovered either during the policy expires;the discovery period for losses related to employee benefit plans extends for up to one year after policy expiration |
| Doctrine of Reasonable Expectations | Legal principle that provides that an insurance policy includes coverages that an average person would normally expect it to include, regardless of what the policy actually provides. |
| Earned Premium | Premium an insurance company has actually earned by providing insurance protection for the designated period of time. |
| Endorsement | A form attached to an insurance policy that alters the policy's coverage, term, and conditions. The additional coverage is listed in the policy, and the cost of insuring each risk must be added to the cost of the premium. |
| Errors and Omissions (E&O) Insurance | Professional liability coverage that protects the insured against liability for committing any mistakes in the performance of professional duties. |
| Exclusions | Section of an insurance policy that lists property perils, persons, or situations that are not covered under the policy. |
| Exclusive Remedy Doctrine | System of Worker's Compensation was founded;stipulates that the only means available to employee to receive compensation from employers for injuries covered by workers' compensation laws in through benefits mandated by those laws. |
| Exemplary Damages;Punitive Damages | Type of damages intended to punish the defendant and make an example out of them to discourage others from behaving same way. |
| Experience Modification Factor | Used with workers' compensation insurance and is a factor assigned to a company based on its prior three-year loss history compared against the average. Losses are based on only those job codes that apply to the business. |
| Exposure | A condition or situation that presents a possibility of loss. |
| Express Authority | Legal doctrine that states that an agent has the authority specifically given to the agent, either orally or in writing, by the principal. |
| Extended Reporting Periods (ERP) | Period of time provided by claims made commercial general liability coverage form during which coverage provided for claims made after expiration date of policy if certain conditions are met. Basic runs 60 days and can be extended to 5 years. |
| Federal Employers Liability Act (FELA) | Federal law that provided benefits to injured railroad workers who are exempt under states workers' compensation laws. |
| Fidelity Bond | Class of bonds that guarantees an employee's honest discharge of duty. Written to protect an insured from dishonest acts by employees. |
| Fiduciary Bonds | Type of surety bond that guarantees that a person of special trust will fulfill its obligations set forth by law. |
| Financial Responsibility Laws | State laws that require owners or operators of autos to provide evidence that they have the funds to pay for automobile losses for which they might become liable. Insurance is the usual method for providing this evidence to the state. |
| First-Named Insured | The first person listed in the declarations as an insure;may have a higher level of duties or rights under the policy. |
| Garage Coverage Form | Commercial auto coverage form that provides liability, garage keepers, and physical damages coverages for vehicle dealers, including dealers that have repair operations on the business premise. |
| Garagekeepers Insurance | Coverage that is part of the garage coverage form, covers a garage that risk's legal liability for customers' auto in the care, custody, or control of the garage;at the insured's option and for additional premium, can also apply without regard to fault. |
| Hazards | Something that increases the chance of loss. The three types are moral, morale, physical. |
| Hold Harmless Agreement | Contractual arrangement where one party assumes the liability of a situation and relives the other party of responsibility. |
| Host Liquor Legal Liability | Additional coverage to a CGL, where the insureds are not in the business of selling or serving liquor, covers insured for their legal responsibility for BI or PD to others;examples:office picnic where beer and wine is served. |
| Insured Contracts | Term used in the CGL and business owners liability forms to describe contracts for which contractual liability coverage is available under the policy, such as LEASE. |
| LEASE-Contractual Agreements | Leases, Easement of license agreements, agreement with a municipality as required by ordinance, sidetrack agreement, elevator maintenance agreements. |
| LEASE | L-Lease of premises, E-Easement of license agreements, A-Agreement with a municipality as required by ordinance, S-Sidetrack agreement, E-Elevator maintenance agreements. |
| Jones Act | Federal Law that allows members of ships' crews to sue their employer/ship owners at common law for injuries caused by the employer/ship owner's negligence. |
| Judicial Bond | Category of surety of bond that guarantees that the principal will fulfill certain obligations set forth by law-includes fiduciary bond and court bonds. |
| Lessor Endorsement | Commercial auto endorsement used to make leased vehicles considered owned vehicles for coverage purposes. |
| Libel | A false publication, as in writing, print, signs, or picture that damages a person's reputation. |
| Liquor Liability Coverage | CGL coverage form that provides coverage for liquor liability excluded by the standard CGL policies for those who are in the business of manufacturing, disturbing, selling, serving, or furnishing alcoholic beverages. |
| Longshore and Harbor Workers' Compensation Act | Endorsement used with the workers' compensation and employers liability policy that cover the additional benefits required by federal law for maritime workers injured while working on navigable waters or shore-site areas. |
| Monopolistic State Fund | Method of providing workers' compensation coverage used in some states;employers must purchase workers' compensation insurance from a state fund;private insurance companies are not allowed to compete. |
| Negligence | The lack of reasonable care that is required to protect others from the unreasonable chance of harm. |
| Newly Acquired Vehicles | New or used vehicles acquired by the insured during the policy period in addition to or as replacement to vehicles already owned and listed on the policy. |
| No-Fault Insurance | Form of auto insurance where each insurance company pays the damages of its own insureds, regardless of who was at fault for the accident. |
| Obligee | The party to whom the principal makes the promise and for whose protection the bond is written. |
| Obligor/Principal | The party bound or obligated to do or not to do something for another party. |
| Occurrence | A loss that occurs at a specific time and place or over a period of time. |
| Occurrence Form | CGL coverage form that covers BI or PD that occurs during the policy period, regardless of when the claim is made. |
| Payment Bond | Type of surety bond that guarantees bills for labor and materials will be paid to the contractor as they are due. |
| Permanent Disability | A disability that will affect the worker for the rest of his life. |
| Personal Auto Policy (PAP) | Policy that provides property and liability coverage both owned and non-owned autos used, maintained, or operated by the insured and the insured's family members. |
| Personal Injury | Injury other than bodily injury arising out of such things as libel, slander, false arrest, wrongful entry, violation of privacy, and malicious prosecution. |
| Pollution Liability Coverage Extension Endorsement | CGL endorsement that provides coverage for BI and PD claims arising out of pollution losses; excludes coverage for pollution clean-up costs. |
| Position Schedule Bond | Fidelity bond that covers specifically named positions in the company, rather than the individuals who hold these positions. |
| Premises and Operation | Business liability exposure arising out of the business location or the activities of the business;covered under the CGL. |
| Premium Audit | Survey of the insured's financial records to gather information used to calculate the premium, such as exposures and limits. |
| Producer | General term used to describe someone who sells insurance, such as an agent, broker, or solicitor. |
| Products Coverage in CGL | Coverage in the CGL policy that covers items manufactured or sold by a business when it is off premises. |
| Professional Liability | Liability arising out of rendering or failing to render services of a professional nature. |
| Property Damage | Damage to our destruction of property, including loss of use the property. |
| Replacement Vehicles | When a new vehicle replaces an existing vehicle, the same coverages would apply to new vehicle as were on the car it replaced. |
| Retention Limit;Self-Insured Retention Limit | In an umbrella policy, the amount the insured must pay for a loss that is not covered by an underlying policy before the umbrella will begin to cover the loss. |
| Retroactive Date | Under the claims-made CGL form, a date stipulated in the declarations as the first date on which an event may occur and be covered by the policy if a claim is filed. |
| Retrospective Rating | Type of merit rating that bases the insured's premium on losses incurred during the policy period. |
| Risk | The chance of uncertainty of loss. |
| Risk Retention Group | Insurance company formed by several organizations to cover those organizations' liability loss exposures;exempt from most state laws that govern insurance companies. |
| Robbery | The taking or attempted taking of property by one who has caused or threatened to cause bodily harm, or committed a witnessed, obviously unlawful act. |
| Safe Burglary | The unlawful taking of property from a locked safe or vault, evidence by marks of forcible entry or removal of entire safe or vault. |
| Second Injury Fund | A fund established under workers' compensation law to help pay any increased compensation that may result when an employee with a previous injury is hired and then is injured again;most states will help pay. |
| Single Limit;Combined Single Limit | One policy limit that applies to both BI and PD losses. |
| Slander | Oral false statements injurious to a person's reputation;a false and malicious statement of report about someone. |
| Special Damages | Category of compensatory damages that includes all direct and specific expenses involved in a particular loss, such as medical expenses and lost wages. |
| Split Limits | Policy limit that provides separate limits for BI and PD. |
| Supplementary Payments (BAILED) | Provides extra coverage over and above the insured's limits of liability. |
| BAILED | B-Bonds:Paid with no limit except $250 bail bond, A-First Aid:No limit, I-Interest on judgments' against client;No limit, L-Loss of earnings, $250/day, E-Expenses incurred at request of insurer, D-Defense cost and investigation cost;No limit. |
| Surety | In bonds, the party (often the insurance company) that agrees to be responsible for loss that may result if the principal does not keep their promise. |
| Surety Bond | Bond that guarantees that someone will perform faithfully whatever they agree to do or that someone will make and agreed-upon payment to another party. |
| Temporary Disability | A disability that will go away over a period of time. |
| Theft | A broad term encompassing any unlawful taking of property, including burglary and robbery. |
| Tort | A civil wrong for which monetary damages may be provided;does not include losses arising out of contracts. |
| Trailer Interchange Insurance | Under the truckers coverage form, covers damage to a specific trailer under the policy of the trucker in whose possession the trailer is at the time of loss. |
| Warranty | A specific agreement between the insured and the insurer that becomes a part of the insurance policy;a breach of warranty can void the policy. |
| Watercraft Policy | Package policy that provides property, liability and medical payments coverage for losses arising out of ownership, maintenance, or use of a watercraft. |
| Workers' Compensation Common Law Defenses | Assumption of risk, Contributory negligence, Fellow servant rule. |
| Umbrella Policy | Type of policy that provides broad coverage for an insured's liability over and above liability covered by an underlying contract;may also cover losses that are excluded by the underlying policy;available as personal or commercial. |
| Underinsured Motorists (UIM) | Auto coverage that pays the difference between the insured's actual damages for bodily injury and the amount of liability insurance carried by the at-fault driver;may be added to personal or commercial auto policy by endorsement. |
| Uninsured Motorist (UM) | Auto coverage provide protection for insured involved in accident with person no insurance at-fault;Also those no insurance, motorists insurance coverage below state's min financial responsibility laws, drivers insurance companies insolvent & hit-and-run |
Created by:
abin.george
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