Vocabulary Flashcards
to get good
Any attempt by an insured to receive full value for a partially damaged item by offering the damaged property to the insurance company. The company is under no obligation to pay for this.
Abandonment
A tort law concept in which an individual can be found legally responsible without being negligent.
Absolute Liability
An element of contract law under which one party accepts the offer of another party.
Acceptance
An unexpected and unintended change happening occurring at a known time and place.
Accident
A method of valuing loss under which the insurance company will pay the Replacement Cost Value of an item minus depreciation.
Actual Cash Value (ACV)
These coverages are provided without additional cost in property contracts. Examples would include payment for Debris Removal and for a Fire Department Service Charge. The coverages may pay an amount in addition to the stated limits of the policy.
Additional Coverages
An indirect loss coverage designed to offset the additional costs of living in temporary quarters while a dwelling is being rebuilt or repaired. Found in Homeowners and Dwelling policies.
Additional Living Expenses
(see “Authorized Company”) A company that has sought admission and been approved to conduct the business of insurance within a particular state.
Admitted Company
In Insurance, this can best be described as the likelihood of the worst possible risks seeking the best possible coverage. For example, a person who seeks to buy insurance for his home following a TV broadcast that a wildfire is three miles away and blowing his direction.
Adverse Selection
Liability resulting from damage caused to a business by the misrepresentations of another. Aldo can include theft of a copyrighted trademark.
Advertising Injury Liability
Synonym for Insurance Producer
Agent
Also known as a General “XX”, this is the limit expressed in a commercial liability policy indicating how much an insurance company will pay in total during any policy period.
Aggregate Limit
A method of valuation in which the insured and the insurance company agree on the value of an insured item before a loss occurs. If and when a covered loss does occur, the company pays THIS of the item without considering depreciation.
Agreed Value
A contract in which both parties won’t benefit equally.
Aleatory Contract
A company started or chartered in a country other than the USA.
Alien Company
Synonymous with “Special/Open Perils”, these words are meant to convey that the company is providing Special or Open Perils coverage on a Property Policy. This term is an antiquated term that is legally indefensible because it implies everything is covered when in actuality there are exclusions even with Special or Open Perils coverage.
All Risk
In Commercial Property Insurance, this term refers to a process in which the insured and the company seek to place a value on damaged property by hiring three appraisers. When two of the three agree on the value of the damage, it is binding on both parties.
Appraisal
Synonymous with “other structure”, in a Homeowners Policy, this is a building or structure, other than a dwelling. Ex: attached garage.
Appurtenant Structure
A process under which two parties (the insured and the insurance company) can settle a claim dispute without the need to go to court. Three people hear arguments from both parties and set the amount that should be paid under the claim. The determination made by them may or may not be binding.
Arbitration
A covered peril under an Ocean Marine policy, it covers loss due to piracy
Assailing Thieves (Piracy)
Refers to the assignment of ownership of a policy from one policyowner to another
Assignment
A legal defense in a negligence claim. If the injured party undertook an activity known to involve risk, it may be difficult for the person to collect damages if they are injured.
Assumption of risk
When an insurance company underwrites a risk that varies.
Audit
Also known as an Admitted Company, this receives a Certificate of Authority as proof they are admitted to do business in a particular state.
Authorized Company
An individual or company that has care, custody, or control of someone else’s valuable property
Bailee
A peril or cause of loss form in which 11 named Perils can be covered in Commercial Lines Property Policies and 9 named perils can be covered in Personal Lines Policies
Basic Perils
Protection generally provided tenants against loss to additions or changes made at their own expense that enhance the value of the property they occupy.
Betterments and Improvements
An instrument that provides interim, temporary coverage. This can be oral or written in nature.
Binder
A policy covering Property and Casualty losses associated with owning or using a boat.
Boatowners Policy
Used extensively in Liability contracts, this refers to injuries sustained by a human being or the death of a human being.
Bodily Injury (BI)
A policy or coverage form designed to cover damage occurring to and damage occurring from a boiler or other piece of machinery. Only sudden and accidental damage is covered. Today, more commonly known as Equipment Breakdown Coverage
Boiler and Machinery
Failure to use a reasonable standard of care.
Breach of Duty
HO-2
Broad Form Homeowners
A peril or cause of loss form in which 14 named Perils plus collapse can be covered in Commercial Lines Property Policies and 12 named Perils plus collapse can be covered in Personal Lines Forms
Broad Perils
These regulations dictate how buildings must be constructed to ensure safety and other concerns are met.
Building Ordinance
As defined in a Commercial Crime Policy, this is the taking of property from a premises that is closed and locked. Furthermore, there must be visible signs of forced entry or exit.
Burglary
Coverage available under Commercial Property insurance, this is designed to replace a lost income following a covered loss that interrupts the income of a business.
Business Income
Coverage available under Commercial Property insurance including Business Income coverage and Extra Expense coverage, both of which are defined separately in this glossary.
Business Interruption Insurance
Property owned, leased, or rented by a business that is used to conduct business.
Business Personal Property
A policy for smaller, low-risk businesses that includes both property and liability insurance bundled together in a package.
Businessowners Policy (BOP)
Termination of an insurance contract DURING a policy period, enacted by either party.
Cancellation
An agency agreement in which the agency agrees to exclusively represent one insurance company
Captive Agency
Property in your possession belonging to others for which you are legally responsible.
Care, Custody, or Control.
Coverage available through an Ocean Marine policy: it pays the cargo owner of the ship if the cargo is damaged while being shipped over water.
Cargo Coverage
The side of the P&C insurance business concerned with protecting your pocketbook should you become legally liable for injuring a third party’s body or property.
Casualty
A loss that causes damage to a significant number of people at the same time. Including floods, wars, and earthquakes, and they’re typically excluded.
Catastrophic Loss
Found in property policies, these forms include Basic, Broad, and Special Perils
Cause of Loss Forms
Proof of in-force insurance.
Certificate of Insurance
A covered peril under a Basic Peril cause of loss form. These include actions by striking employees and looting.
Civil Commotion/Riot
A commercial Liability policy in which the policy covering a risk at the time a claim is made is obligated to defend or settle covered claims.
Claims Made Policy
A tool used by insurers in Commercial Property policies to encourage policyowners to purchase sufficient insurance. Claims for a partial loss to property not insured to a certain percentage of value will be reduced.
Coinsurance
Collapse of a building due to covered perils or certain other occurrences is covered with either the Broad or Special Cause of Loss Form
Collapse
Available under Coverage for Damage to Your Auto, this covers your automobile if it collides with another car or a stationary object, or if it overturns.
Collision
The primary liability policy for commercial entities. Can be sold as part of the commercial package policy or as a monoline coverage.
Commercial General Liability (CGL) Policy
The P&C policies sold to businesses: the Commercial Package Policy and the BOP, for example.
Commercial Lines
This policy offers a variety of coverages under one commercial policy
Commercial Package Policy
Conditions which apply to all coverage sections of the Commercial Package Policy
Common Policy Conditions
The Common Dec Page for the Commercial Package Policy: it works like a table of contents.
Common Policy Declarations
A legal defense to negligence in which the injured party is held somewhat responsible for their own injury
Comparative Fault
Damages awarded in a liability claim that are designed to compensate the injured party for their actual loss. Ex: medical bills and lost wages
Compensatory Damages
This term is used in auto policies: in today’s personal auto policy it is known as Other Than Collision Coverage. It provides “All Risk” type coverage for damage to a car. (Most glass damage falls under this)
Comprehensive
HO-5
Comprehensive Form Homeowners
The act of hiding a portion of the truth either in connection with a claim or on the application for a policy. This can void coverage.
Concealment
The concept in insurance that states that when two perils (one covered and one excluded) damage covered property at the same time that the insurance company will only pay for damage caused by the covered peril.
Concurrent Causation
A contract, such as insurance, that can’t be fully executed until something happens in the future.
Conditional Contract
This section of a policy essentially directs how the policy works. “The Rules”
Conditions
HO-6
Condominium Form Homeowners
An Indirect Loss. An endorsement that can be purchased with an Equipment Breakdown Policy that would cover losses that occur after, and as a result of, a direct loss.
Consequential Loss
In a contract, something of value. Parties to a contract must provide this in order for the contract to be legally enforceable.
Consideration
An agreement between two or more parties.
Contract
