Study 7-8: Key Terms Flashcards
Compensatory damages
A sum of money to which a plaintiff is entitled that makes amends for an actual loss sustained and nothing more.
Bodily injury
A term used in auto and liability policies meaning physical injury, including sickness, disease, mental injury, shock, or death.
Property damage
Injury to real or personal property through another’s negligence, willful destruction, or by some acts of nature.
Occurrence
A happening or event. Liability policies are usually written on either an accident or occurrence basis. For coverage on an accident basis, the loss or damage must be due to accident; whereas on an occurrence basis, all that is required is the happening or the continual or repeated exposure to an unfavourable situation, neither intended nor expected to cause injury or damage. In reinsurance and insurance, it is also the grouping of related losses into a single loss situation.
Occurrence policy
A liability policy that responds to claims for losses that took place during the policy period, regardless of when claims are made. As a result, claims can be filed years after the time the policy was in effect.
Claims-made policy
Refers to an insurance policy that provides coverage when a claim is made against the policy, regardless of when the claim event took place. A claims-made policy is most likely to be purchased when there is a delay between when the claims occur and when they are filed.
Contractual liability
Liability assumed through a contract, either written or implied. Legal liability policies are based upon liability in tort or negligence and provide limited coverage for contractual liability. However, contractual liability may be covered in many instances as an additional risk with an additional premium.
Product recall insurance
Insurance that indemnifies the insured for the cost of recalling products known or suspected to be defective.
Trade dress
The total image and overall appearance of a company or product that may include features such as size, shape, colour or colour combinations, texture, graphics, or even particular sales techniques.
Medical payments insurance
A special clause in an insurance policy that covers medical payments of others, irrespective of the insured’s legal liability.
General aggregate limit
The maximum amount an insurer will pay for covered losses during a policy period.
Each occurrence limit
The maximum amount the policy will pay in the event of any one claim or occurrence.
Deductible
An agreed specified amount that the insured must pay on a claim before the insurance company will cover the rest of the claim. This amount is agreed upon by both the insurer and the insured. An insured’s obligation to pay a deductible is not based on whether the insured is at fault.
Pollution exclusion
Standard general liability policies include an exclusion for loss arising out of pollution. For certain exposures, this exclusion may be modified; for example, “sudden and accidental” pollution arising from a fire.
Terrorism
An ideologically motivated unlawful act or acts, including but not limited to the use of violence or force or the threat of violence or force, committed by or on behalf of any group(s), organization(s), or government(s) for the purpose of influencing any government and/or instilling fear in the public or a section of the public.
