Study 4: Underwriting the Risk: Property - Key Terms

Question 1

Hazard

Answer 1

(1) A risk or probability that the event insured against might occur. (2) A condition that engenders or increases the chances of a loss.

Question 2

Common hazard

Answer 2

A hazard that is generally found in most occupancies. Heating, lighting, and housekeeping are examples of hazards common to most occupancies.

Question 3

Subrogation

Answer 3

Legal process by which an insurance company, after the payment of a loss, is assigned the rights of the insured to recover the amount of the loss from those who are legally liable for it.

Question 4

Automatic sprinkler

Answer 4

A device to protect property from damage by fire in which water is piped to devices called “sprinkler heads” that melt with heat and release water to extinguish a fire.

Question 5

Accommodation sharing

Answer 5

An arrangement set up by means of a website or mobile app in which a property primarily occupied by its owner is rented for a short time period to a third party.

Question 6

Special hazards

Answer 6

Foreseen hazards/risks common to certain types of businesses that are not covered in an ordinary policy. For example, woodworking plants and paint shops.