Chapter 2 - Insurance Products (Product Types) Flashcards
Tort
A legal term to mean a civil wrong or injury, not arising out of any contract, which action for damages may be sought
Employer’s Liability
Insurance that indemnifies the insured against legal liability to compensate an employee or their estate for bodily injury, disease or death suffered, owing to the the negligence of the employer, in the course of employment
Marine & aviation liability insurance
Insurance that indemnifies the policyholder against the legal liability to compensate a third party for bodily injury, death, or damage to property arising out of operation of the vessel or aircraft
Public liability insurance
Insurance that indemnifies the policyholder against legal liability for the death of or bodily injury to a third party or for damage to property belonging to a third party, other than those liabilities covered by other liability insurance
Product liability insurance
Insurance that indemnifies the insured against legal liability for the death of or bodily injury to a third party, or for damage to property belonging to a third party, that results from a product fault
Professional Indemnity Insurance
Insurance that indemnifies the policyholder against legal liability for losses resulting from negligence in the provision of a serice
D&O Insurance
Director’s & Officers liability insurance that indemnifies the policyholder against the legal liability to compensate third parties owing to any wrongful act of the insured in his or her capacity as a director or officer of a company
Environmental Liability Insurance
Insurance that indemnifies against the legal liability to compensate third parties as a result of bodily injury, death and damage to a property as a result of unintentional pollution for which the insured is deemed responsible
Claim award inflation
When a court award is in favour of a claimant and it triggers a large number of similar claims with the same legal complaint against the insured
Escalation clause
A clause included in an insurance contract that, each year, allows for the level of cover to automatically increase in line with an appropriate inflation index
Goods in Transit Insurance
Commercial insurance cover against loss of or damage to goods whilst being transported in vehicles specified in the policy
Actual total loss
Loss that occurs in property insurance (particularly marine and aviation) which occurs in one of three ways:
1) The insured item is totally destroyed
2) Where the insured item is so damaged that it can no longer be classed as the type of object originally insured
3) Where the insured is irretrievably deprived of the insured item
Constructive total loss
Loss where the insured abandons the insured item because an ‘actual total loss’ is unavoidable or because the costs of preventing a total loss exceed the value saved
Crop insurance
Insurance that indemnifies the insured against loss to their crop due to specified perils
Household property insurance
Insurance that indemnifies the insured for the amount required to fully reinstate the property, this amount is different to the market value of the property
Moveable property insurance
Insurance that indemnifies the insured for the value of the contents lost or damaged
Motor property insurance
Insurance that indemnifies the insured for the loss or damage of the depreciated value of the vehicle insured
Extended warranty insurance
Insurance that covers losses arising from the need to replace or repair faulty parts in a product
Estimated Maximum Loss (EML)
The maximum amount that the underwriter believes could feasibly be lost in a single incident
Fidelity guarantee Insurance
Insurance that covers the insured against financial losses caused by dishonest actions of its employees (fraud or embezzlement)
Credit insurance
AKA pecuniary loss insurance. Insurance that covers against the risk that debtors will not pay their obligations
Creditor insurance
AKA payment protection insurance. Insurance that provides cover to insureds who are subject to obligations to repay credit advances or debt
Legal Expenses Cover
Insurance that indemnifies the insured against legal expenses incurred as a result of:
> Legal proceedings being initiated against the insured
> The need for the insured to initiate proceedings
Personal Accident Cover
Insurance that pays a specified fixed amount in the event that an insured party suffers the loss of one or more limbs or other specified injury, or accidental death
