Property and Casualty Insurance Terms

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Property and Casualty Insurance Terms
2015-01-04 18:44:57

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  1. What is absolute liability? Also known as 'strict liability'?
    Liability that arises from extremely dangerous situations. (Explosives, wild animals as pets)
  2. What is an Additional Insured?
    A person, firm, or corporation other than the Named Insured on a policy,or a lender in a mortgage clause, who is protected against loss
  3. What is an Admitted Company?
    A company that meets the state insurance department's standards and is authorized to do business in the state.
  4. What is the Aggregate Limit?
    A type of policy limit found in liability policies that limits the coverage to a specified total amount for ALL losses occurring within the policy period.
  5. What is an Alien Company?
    An insurance company in a country other than the United States
  6. All-Risk Insurance
    Insurance protecting the insured from loss arising from any peril other than those that are specifically excluded by name.
  7. How does appraisal work? What is it for?
    If the insured and insurer cannot agree on the amount of loss, either may demand an appraisal. If demanded, each will select an appraiser, who jointly will select an umpire.
  8. What is an Appurtenant Structure?
    This coverage is also called 'other structures' or 'out buildings'
  9. How does Assigned Risk or ' the auto insurance plan' work?
    To become authorized, a Casualty company must agree to participate in the Assigned Risk Pool and take its turn providing Auto insurance to high-risk drivers..
  10. What is a Blanket Position Bond?
    A fidelity bond that specifies a single limit of liability applicable to each employee involved in a loss.
  11. What is a bond?
    An obligation of the insurance company to protect one against financial loss caused by he acts of others.
  12. Business Owners Policy (BOP)
    A commercial package policy designed for certain types of small businesses, that combines Property and Liability coverage. It is very similar to a Commercial Package Policy (CPP)
  13. What is casualty insurance?
    A type of insurance that is primarily concerned with losses caused by injury to persons and legal liability imposed upon the insured for such injury or damage to property of others.
  14. Commercial Package Policy
    A multi peril, multiline policy that provides a broad spectrum of Property and Casualty coverages for businesses.
  15. Compulsory Insurance
    Any form of insurance which is required by law
  16. Contingent Business Income
    A time-element coverage that protects the insured against Indirect Loss that results because of a Direct Loss to a supplier business, subcontractor or manufacturer location.
  17. Contingent Liability/ Vicarious Liability
    Liability that an insured person or business incurs because of the actions of others (family or employees)
  18. Contractual Liability
    Provides coverage against liability arising out of an insured's contractual obligations
  19. Declarations Page
    A portion of the insurance contact that contains information such as: name and address of the insured, the property insured, its location and description, the policy period, the amount of insurance coverage, applicable premiums, and supplemental representations made by the insured.
  20. Direct Writer/ Exclusive or captive producers
    An insurance company that sells its policies through licensed agents who represent the insurer exclusively.
  21. Employers Liability Coverage
    Coverage provided under a Worker's comp policy to cover the employer's liability arising out of employees' work-related injuries.
  22. Employer's non-ownership liability
    Provides coverage to an employer for liability arising out of an employee's use of his own auto in the employer's business.
  23. Extended Coverage Endorsement (ECE)
    A specific endorsement, attached to a SFP, usually providing coverage for windstorm, hail, explosion, riot, civil commotion, aircraft, vehicular damage, volcanic eruption and smoke damage. (WHARVVES)
  24. Extra Expense Insurance
    A time-element coverage for additional expenses incurred by the insured business to continue operations following a direct loss by a peril that is insured against
  25. Fair Plan
    Makes property insurance available and affordable to insureds who might otherwise be uninsured because of 'environmental hazards'
  26. Fidelity Bond
    A class of bonds that guarantees an employee's honest discharge of duty
  27. Fiduciary
    A person who occupies a position of special trust and confidence. Insurance producers are considered to be fiduciaries.
  28. Floater policy
    protection that follows movable property, covering it wherever it may be, rather than applying only at a fixed location. An example is a personal articles floater(PAF)
  29. Flood insurance
    Insurance designed to reimburse property owners for loss due to flood or to flood-related erosion. Administered through the Federal Insurance Administration.
  30. Garage policy
    A policy that provides coverage for garage businesses (dealers, service stations, garages, parking lots, etc) It covers: liability, physical damage, and garagekeeper's losses
  31. Garagekeeper's Liability
    This covers a garage risk's legal liability for customer's autos in the care, custody, or control of the garage.
  32. Hull Insurance
    In Ocean Marine and Aviation insurance, insurance against physical damage to plane or ship
  33. Improvements and Betterments
    Additions or chanbes made by an insured to a building that may or may not be owned by him. Cost arising from these changes may enhance values and thereby require special insurance consideration.
  34. Inherent Vice
    A condition or defect that exists within property from the beginning. A tendency of the property itself. Insurance policies usually exclude inherent vice.
  35. Inland Marine Insurance
    A form of insurance originally designed as an extension of Marine coverage to insure transportation of goods over land.
  36. Instrumentalities of Transportation and Communication
    A category of the Nationwide Definition that includes several different classes of Inland Marine, including bridges, tunnels, pipelines, etc
  37. Insurance Commisioner
    Common title for head of state department of insurance. Also called Director in some states.
  38. Insuring agreement/ Insuring clause
    The section of an insurance policy that states which losses will be indemnified, what property is covered, which perils are insured against.
  39. ISO (Insurance Services Office)
    An organization, made up of member companies, that analyzes statistics collected from members and then establishes and files standard rates for many lines of insurance.
  40. Loss Ratio
    The percentage of losses to premiums, usually losses incurred to premiums earned.
  41. Marine Insurance
    A form of insurance primarily designed to cover property in transport over land or sea
  42. Mercantile Open Stock Burglary Policy
    Crime policy that covers the insured's merchandise, furniture, fixtures, and equipment against burglary
  43. Monopolistic State Fund
    A state insurance plan that prohibits competition by private carriers. For example: worker's comp in some states.
  44. Mutual Insurance Company
    An incorporated insurance company, without capital stock, whose governing body is elected by the policyholders.
  45. Named Peril Policy/ Specified Perils Policy
    Policies that insure against only the perils named.
  46. Name Schedule Bond
    Fidelity bond that covers each employee named in the policy schedule for the amount listed in the schedule.
  47. Nationwide Definition
    A document designed to categorize and classify risks eligible for Ocean or Inland Marine insurance
  48. Nonowners Automobile Liability Insurance
    Protection for the policyholder against claims for BI and PD liability caused by their employees or others using autos not owned or hired by the insured while conducting business
  49. Nonresident Agent
    An agent licensed in a state in which they are not a resident
  50. Obligee
    In bonds, the party to whom the principal makes the promise, and for whose protection the bond is being written
  51. Occupational Disease
    Impairment of health caused by continued exposure to condition inherent in a person's occupation or a disease caused by or resulting from the nature of an employment.
  52. Ocean Marine  Insurance
    Marine insurance designed to provide broad coverage for cargo and ships in transit over sea.
  53. Owners and Contractors Protective Liability/Independent Contractors Liability coverage
    Part of a Commercial General Liability policy that protects an owner or general contractor against liability arising out of the acts of contractors or subcontractors
  54. Personal Articles Floater
    Personal Inland Marine insurance that provides All-Risk coverage on 9 optional classes of personal property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, and coin collections
  55. Personal Injury Coverage
    Liability coverage for 3rd party claims for damages that are other than physical, such as: libel, slander, false arrest, wrongful eviction, invasion of privacy, etc.
  56. Personal Property floater
    Personal Inland Marine floater that provides All-Risk coverage on unscheduled personal property
  57. Position Schedule Bond
    Fidelity bond that lists covered job categories, each with a separate amount of insurance, rather than the individuals holding those positions.
  58. Principle
    In bonds, the party who promises to do (or not to do) a specific thing.
  59. Products and Competed Operations
    A form of General Liability insurance that covers a company against liability arising out of its products(manufacturer) or its completed operations(contractor/ architect)
  60. Reciprocal Company
    An unincorporated group of subscribers that exchange insurance responsibilities with other members, managed by an attorney-in-fact
  61. Retention Limit
    In an Umbrella Liability policy, the amount the insured must pay for a loss not covered by an underlying policy, before the Umbrella will begin to cover losses
  62. Safe Burglary Policy
    A crime  insurance policy that is designed to cover burglary of property form a safe or felonious removal of the entire safe from the premises
  63. Second-Injury Fund
    A fund established under Worker's Comp laws in most states to help pay any increased compensation that may result when an employee with a previous injury is injured again
  64. Stated-Value Policy
    Insurance contact written to insure an item of property for a specific amount of insurance. Used in insuring hard-to-value items, such as fine arts
  65. Supplementary payments
    Provide 'extra' coverage over and above the insured's limits of liability.
  66. Surety
    The party that agrees to be responsible for loss which may result of the principal does not keep his promise