Glossary
Previous - 1 - -
1. Abandonment
As used in property insurance, prohibits the insured from abandoning damaged property to the insurance company for repair or disposal
2. Additional Insured
A person or organization for whom insured status is arranged by endorsement
3. Advertising Injury
General liability coverage that insures against libel, slander, invasion of privacy, copyright infringement and misappropriation of advertising in connection with the insured’s advertising of its goods or services
4. Agent
An authorized representative of an insurance company.
5. Aggregate
The maximum amount an insurance company will pay during the policy
6. Application
A form with the information needed for an insurance company to underwrite and rate a specific policy
7. Assignment Assignment
The transfer of ownership of a Life Insurance policy from one person to another
8. Attained Age
Your current age. Your attained age is a factors life insurance companies use to determine premiums.
9. Audit
A verification of the financial records, usually payroll or receipts, of an organization to determine exposures and premiums
10. Automobile
A land motor vehicle, trailer or semi-trailer designed for travel on public roads, not including ‘mobile equipment’
11. Backdating
Backdating is often used to make the age of the applicant lower than it actually was at the time of application so that he/she can get a lower premium. State laws often set limits to this.
12. Bailee Coverage
Coverage on property left in the care of the insured for storage, repair or servicing
13. Basic Limits
The minimum limits of liability that can be carried by an insured
14. Beneficiary
The designated person set to receive the death benefit if the insured should die
15. Best’s Rating
A rating system by A.M. Best Company giving the financial condition of insurance companies
16. Binder
A temporary insurance policy that expires at the end of a specific time period or when a permanent policy is written. A binder is given to an applicant for insurance during the time it takes the an insurance company to complete the policy paperwork.
17. Bond
A written agreement in which one party, the surety, guarantees the performance or honesty of a second party, the principal (obligor), to the third party (obligor) to whom the performance or debt is owed
18. Burglary
Theft of property by forcible entry, which is evidenced by visible signs, in a premises, by a person
19. Cancellation
The termination of an insurance policy usually before its expiration
20. Carrier
The insurance company which provides coverage
21. Cash Benefits
The Money that is paid to the policy holder upon settlement of a covered claim.
22. Cash Value
The equity amount or “savings” accumulation in a whole life insurance policy.
23. Casualty Insurance
Insurance that covers loss caused by injuries to persons and the legal liability imposed on the insured for injury or for damage to property of others
24. Catastrophe
A severe loss causing sizable financial loss
25. Claim
A request by a policyholder or a claimant for payment under a policy of insurance
26. Claim Expense
Expenses of settling or investigating a claim
27. Claimant
The person presenting a claim
28. Claims Reserve
An amount of money set aside to meet claims reported but not paid
29. Class
A group of businesses who have common or similar exposures and are grouped together for rating purposes
30. Classification
The arranging or establishing of business groups or categories for rating purposes
31. Coinsurance Provision
An insurance provision for property coverages in which the policyholder must carry an amount of insurance that is at least equal to a set percentage of the value of the property in order to receive full payment of a loss
32. Collapse
Collapse of a building and collapse of personal property within a building due to specified causes (such as weight of snow, ice or rain). Does not include collapse due to design error or due to faulty workmanship or materials if the collapse occurs after construction is complete
33. Collision Insurance
Provides for payment to a covered automobile resulting from the striking of another object by a moving vehicle
34. Completed Operations
A General Liability coverage for the work of the insured that has been completed away from the business premises
35. Compulsory Insurance
Insurance that is required by law
36. Concealment
Failure to disclose facts which may void an insurance policy
37. Conditional Receipt
Given to policy owners when they pay a premium at the time of the application. These receipts bind the insurance company, provided your policy is approved, but are subject to any other conditions stated on the receipt.
38. Conditions
Things agreed upon in an insurance policy that state the rights and the requirements of the insured and the insurer
39. Consequential Loss
An indirect loss such as the reduction in value of property that is the result of a direct damage loss
40. Contestable Clause
A provision in an insurance policy setting forth the conditions or time period under which the insurance company may contest or void the policy. After this time has lapsed, typically two years, the policy cannot be contested. Example: Suicide.
41. Contingent Beneficiary
Person or persons designated to receive the value of an insurance policy in case the original beneficiary is not alive
42. Contract
An agreement between two or more parties with characteristics of mutual assent, competent parties, a valid consideration and legal subject
43. Convertible Term
A policy that may be changed to another form by contractual provision and without evidence of insurability. Most term policies are convertible into permanent insurance.
44. Countersignature
The signature of a licensed agent or representative on a policy that is required to validate the policy
45. Coverage
Coverage is just another term for Insurance. It can be used to mean either the dollar amounts of insurance purchased ($500,000 of liability coverage), or the type of loss covered (coverage for theft).
46. Cross-Purchase Plan
An agreement that provides that upon a business owner’s death, surviving owners will purchase the deceased’s interest, often with funds from life insurance.
47. Cumulative Injury
A type of injury which occurs from the repetition of tasks over an extended length of time
48. Death Benefit
The amount of money paid to the beneficiary when the insured person dies
49. Debris Removal
The cost of removal of debris from covered property damaged by an insured peril
50. Deductible
The amount of loss which is paid or absorbed by the insured prior to determining the insurance company’s liability
51. Deposit Premium
The amount of premium required at the beginning of a policy prior to the actual premium being determined
52. Depreciation
The reduction in value of property over a period of time. Usually as a result of age, wear and tear, or economic obsolescence
53. Direct Damage
Causes of loss that produce direct and straightforward property damage (without interruption in time or deviation in space) from the cause of the event to the damaged property
54. Double Indemnity
Payment of twice the basic benefit in the event of loss resulting from specified causes or under specified circumstances
55. Drop Down Provision
A clause used in Umbrella policies providing that the Umbrella will ‘drop-down’ over underlying policy aggregate limits when they have been reduced or exhausted
56. Earned Premium
The amount of premium that has been used for certain periods of time
57. Effective Date
The date on which an insurance binder or policy goes into effect
58. Employee Leasing
A staffing method which an employee leasing company provides all or most of its client’s employees
59. Endorsement
A document attached to an insurance policy that changes the original policy provisions
60. Equipment Floater
A property insurance coverage for equipment that is often moved from place to place
61. Estimated Premium
A preliminary premium amount that could be adjusted based on a variance in exposures
62. Evidence of Insurability
Any statement or proof of a person’s physical condition, occupation, etc., affecting acceptance of the applicant for insurance.
63. Exclusions
Specified hazards listed in a policy for which benefits will not be paid.
64. Expense Constant
A small flat expense charged to Workers’ Compensation policies
65. Experience Modifier
A debit or credit factor developed by measuring the difference between the insured’s actual past experience and the expected or actual experience of the class of business
66. Expiration
The ending date of an insurance policy
67. Exposure Base
The basis of rates that are applied to determine premium. Some exposures may be measured by payroll, receipts, sales, square footage, area, man-hours or per unit
68. Face Amount
The amount covered by the terms of an insurance contract, usually found on the first page of the policy.
69. Fiduciary Liability
The liability placed on trustees, employers, fiduciaries and professional administrators with respect to errors and omissions in the administration of employee benefit programs
70. Final Expenses
Expenses incurred at the time of a person’s death. These include but are not limited to:funeral costs, court expenses, current bills or debt, mortgages, loans and taxes.
71. Fire Wall
A wall designed to prevent the spread of fire from one part of a building to another
72. Firewall
A computer that protects a company’s private network from outside internet users
73. Fixed Benefit
A death benefit, the dollar amount of which does not vary.
74. Flat Cancellation
The full cancellation of a policy as of the effective date of coverage which requires the return of paid premium in full
75. Flat Cancellation
The full cancellation of a policy as of the effective date of coverage which requires the return of paid premium in full
76. Flood Coverage
Coverage for damage to property caused by flood
77. Flood Exclusion
A provision in most all property insurance policies eliminating coverage for damage by flood and possibly other types of water damage, such as seepage and sewer backup
78. Follow Form
An umbrella policy provision that follows the underlying policy for coverages and policy provisions
79. Fortuitous Event
An event that is subject to chance without the implication of suddenness
80. Free Look
Trial period required in most states where policy owners have up to 20 days to examine their new policies with no obligation.
81. Frequency
The number of times that a loss will occur within any given period of time
82. Full Coverage
Any form of insurance that provides payment in full of all losses caused by the perils insured against without applying a deductible or depreciation
83. Funeral Expenses
Expenses including casket, vault, grave plot, headstone and funeral director.
84. Glass Insurance
A property insurance policy covering breakage of building glass regardless of cause
85. Governing Classification
In Workers’ Compensation Insurance, the classification that best describes the workers’ compensation exposure of an employer’s business
86. Grace Period
Period of time after the due date of a premium during which the policy remains in force without penalty.
87. Gross Negligence
Willful and wanton misconduct
88. Guaranteed Term
A form of renewable term insurance that remains in force as long as the premiums are paid on time. With guaranteed term insurance, the insurance company cannot terminate the policy during the term.
89. Hired Automobile
An automobile whose exclusive use has been temporarily given to another for a monetary sum or other consideration. The business auto definition of ‘hired autos,’ however, includes autos borrowed except those borrowed from employees or partners
90. Host Liquor Liability
Liability coverage for hosts of business or social functions arising out of the serving or distribution of alcoholic beverages by a party not engaged in this activity as a business enterprise
91. Incontestable Clause
A clause in a policy providing that a policy has been in effect for a given length of time (two or three years), the insurer shall not be able to contest the statements contained in the application. In life policies, if an insured lied as to the condition of his health at the time the policy was taken out, that lie could not be used to contest payment under the policy if death occurred after the time limit stated in the incontestable clause.
92. Incurred Losses
The amount of paid claims and loss reserves within a particular period of time, usually a policy year. Customarily computed as losses incurred during the period, plus outstanding losses at the end of the period, less outstanding losses at the beginning of the period
93. Independent Adjuster
A claims adjuster who provides adjustment services to insurance companies but is not employed by them
94. Independent Contractor
An individual or company who has agreed, in writing, with another party to perform a job or function on behalf of that party
95. Insurability
The condition of the individual wishing to be insured, including their health, susceptibility to injury and life expectancy.
96. Insurance
A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to pay for the loss in the amount specified in the contract.
97. Insurance Policy
The printed form which serves as the contract between an insurer and an insured.
98. Insurance to Value
Insurance written in an amount equal to the value of the property or which meets coinsurance requirements
99. Insured
The party who is being insured. In life insurance, it is the person because of his or her death the insurance company would pay out a death benefit to a designated beneficiary.
100. Insurer
The insurance company; Party that provides insurance coverage, typically through a contract of insurance.
Previous - 1 - -
