Casualty Insurance Flashcards
Additional coverages; coverage extensions; extended coverages; other coverages
Supplement insurance coverage that applies only in certain circumstances, have reduced or separate limits of liability, or require the insured to meet certain requirements before they are applicable.
Aggregate Limit
Type of policy limit found in liability policies that limits coverage to a specified total amount for all losses occurring within the policy period.
Assumption of risk
Defense against liability based on the common law principle that a person who knowingly exposes themselves to danger or injury takes on the risk of loss and cannot hold another person responsible for the loss.
Absolute liability
Type of liability imposed by law on those participating in certain activities that are considered especially hazardous; a person involved in such operations may be held liable for the damages of another even though the individual was not negligent.
Advertising Injury
Coverage in the CGL that covers losses caused by oral or written material that slanders or libels, violates privacy rights or infringes on copyrights, titles or slogans.
assigned risk plan; automobile insurance plan
A state sponsored plan that provides automobile insurance to those who are uninsurable under standard auto insurance policies.
bid bond
Type of surety bond that guarantees that if a contractor’s price is accepted, the contractor will enter into a contract and provide the required performance bond.
bodily injury (BI)
Defined in most policies to include injury, sickness, disease and death resulting from any of these at any time.
burglary
The taking of property by a person unlawfully entering or leaving the premises as evidence by visible signs of forced entry or exit.
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 period.
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.
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.
certificate of insurance
Written form that verifies a policy has been written; provides a summary of the coverage provided under the policy.
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.
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.
concealment
The withholding of a material fact involved in the contract on which the insurer relies.
court bond
A type of surety bond used to settle legal arguments that do not involve monetary damages.
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.
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).
contribution by equal shares
Type of other insurance condition found in liability policies; it calls for all insurers to contribute equally up to the limit of the policy having the smallest limit, whereupon that company stops paying, the other companies share in the remainder of the loss until the loss is paid in full or all policy limits are exhausted.
Custodian
An insured, partner or employee who has care and custody of insured property within the premises.
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.
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.
endorsement
A form attached to an insurance policy that alters the policy’s coverage, terms 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.
exclusions
Section of an insurance policy that lists property, perils, persons or situations that are not covered under the policy.
discovery form
Commercial crime form that covers losses that are sustained at any time and discovered either during the policy period or up to 60 days after the policy expires; the discovery period for losses related to employee benefit plans extends for up to one year after policy expiration.
earned premium
Premium an insurance company has actually earned by providing insurance protection for the designated period of time.
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.
exclusive remedy doctine
One of the precepts upon which the workers’ compensation system was founded.
Stipulates that the only means available to employee to receive compensation from employers for injuries covered by workers’ compensation laws is through the 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 the same way.
exposure
A condition or situation that presents o possibility of a loss.
extended reporting periods (ERP)
Period of time provided by the claims made commercial general liability coverage form during which coverage will be provided for claims made after the expiration date of the policy if certain conditions are met.
The basic runs 60 days and can be extended to five years.
Supplemental runs for an unlimited duration, but is available only by endorsement for an additional premium.
fidelity bond
Class of bonds that guarantees an employee’s honest discharge of duty.
Written to protect an insured from dishonest acts by employees.
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.
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.
Federal Employers Liability Act (FELA)
Federal law that provides benefits to injured railroad workers who are exempt under state workers’ compensation laws.
fiduciary bond
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.
