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Glossary | A
Accident - An unusual, fortuitous, unexpected or unforeseen event or occurrence. A mishap that is not expected or designed.
Accounts Receivable Insurance - Coverage which protects business against their inability to collect their accounts receivable because of the loss of supporting records.
Additional Insured - A person other than the named insured who is protected by the terms of the policy. Most automobile policies, for example, insure a specific individual as an insured, but also insure anyone driving with that insured's consent. The additional insured may be "named" or "unnamed".
Adjuster - The individual who represents an insurer on investigations and dealings with respect to the settlement of claims. This may be a salaried employee of an insurer or an Independent Adjuster hired by the insurer.
Advertiser's Liability Insurance - Coverage protecting an insured against claims for libel, slander, defamation, infringement of copyright, invasion of privacy, etc., arising out of its advertising program.
All Risk Policy - A name given to an insurance policy which covers against the loss caused by all perils except those which are specifically excluded by the terms of the policy.
Amount of Insurance - The limit of payment for which an insurer is liable under a policy.
Automatic Coverage - Coverage provided in certain policies which states that the insurer assumes liability for property other than that covered at the commencement of the contract, if and when the policyholder acquires ownership, or in the event of some similar happening which the policy describes. For example, new property may be covered automatically.
Automatic Reinstatement - After a claim has been paid or the property restored, most policies automatically return the stated limit of insurance to its original amount.
Glossary | B
Blanket Crime Policy - An individual policy covering several crime perils on a single amount rather than on individual limits.
Blanket Policy (Insurance) - Insurance of two or more items, or locations, in one aggregate sum insured without separate amounts for each item.
Blanket Position Bond - A Fidelity Bond covering all employees of the employer (Insured).
Bodily Injury - A term used in auto and liability policies meaning physical injury, including sickness, disease, mental injury, shock or death.
Boiler and Machinery Insurance - Coverage that indemnifies in the event of loss with respect to and arising from the ownership, use and operation of boilers, pressure vessels and machinery.
Broker - An independent person or firm who acts on behalf of the insured in placing business with insurance companies.
Burglary - Unlawful removal of property from premises involving visible forcible entry.
By-law Endorsement - An endorsement explaining how a particular insurance company deals with a claim, which is affected by a local by-law.
Glossary | C
Cancellation Clause - Provision in insurance policies or bonds stipulating how the policy or bond can be cancelled.
Care, Custody and Control - A term used primarily in liability coverages which refers to property belonging to another but which is legally in the insured's possession or under his/her control.
Certificate - Some forms of insurance require that evidence of the existence of a policy be produced in large numbers. In such cases, it is not unusual to have a "master policy" in the central spot and "certificates" indicating the existence of the policy and the participation of the individual, issued to the many participants.
Certificate of Insurance - Written document stating that insurance is in effect. Includes general statement of policy's coverage.
Claim - Strictly speaking, a claim is the exercising of the right of an insured to be indemnified by his/her insurance company for damage suffered. It is frequently used, however, to indicate the amount of the claim. In practice, it is any notification of a possible loss under an insurance policy whether any payment is likely to follow or not.
Claimant - One who makes a claim.
Commercial Blanket Bond - Bond protecting an employer against loss through dishonest acts committed by his employees and covers all employees in the regular service of the employer during the term of the bond. A commercial blanket bond is issued for a fixed amount which is the maximum sum payable for any one embezzlement, whether one or more employees are involved.
Commercial Property Policy - An all risk and all-inclusive policy applicable to stocks of wholesalers, distributors and retailers. Coverage is basically fire, extended coverage, theft and "all other perils".
Compensation - The action taken or the funds paid to make good the loss a person has suffered.
Completed Operations Insurance - Coverage for injuries or damage, excluding damage to completed work itself, occurring after the completion of an operation, but attributed to that operation.
Commerical General Liability Policy - A policy particularly suited to a manufacturer, contractor or large wholesaler or retailer providing broad coverage for claims made against it for bodily injury or damage to property of others for which he may become liable and which arise out of his entire business operation.
Conditions - The general terms or requirements upon which the insurance is based. For the mutual understanding of the parties the conditions will commonly state such matters as how the policy can be cancelled or renewed, provisions as to what the insured should do in the event of a loss, and conditions as to what he should do subsequent to a loss etc.
Consequential Loss - The word "consequential" means something following as an effect or result. It is an indirect result of the occurrence that caused the loss.
Contractual Liability - Liability assumed by a contract either written or implied.
Glossary | D
Data Processing (Equipment Insurance) - A special insurance usually on an all risks basis. Covers physical loss and loss from business interruption if the damage necessitates shutdown of operations.
Debris Removal - A provision in an insurance policy most commonly found in fire insurance providing indemnification for the cost of removal of the debris after a fire.
Declaration - Statement, signed by the insured, warranting that information given by him/her is true.
Deductible - An agreed specified sum to be deducted from the amount of a loss and assumed by the insured.
Demolition Insurance - Insurance against the cost of removing the ruins of a building partially destroyed by an insured peril.
Depositor's Forgery - Provides insurance to a person or corporation to protect against losses by reason of forgery or alteration of any cheque, draft, etc.
Discovery Period - Provision, in some bonds and insurance policies, giving the insured a period after cancellation of the contract to report losses which occurred during the policy or bond period.
Glossary | E
Employer's Liability Insurance - Coverage for legal liability imposed on an employer to pay damages to an employee injured by the employer's negligence.
Endorsement - An amendment added to a written document, particularly an agreement between parties, altering its provisions.
Errors and Omissions Insurance - 1) Insurance covering the legal liability of professionals not usually involved with the care of the human body such as architects, engineers, accountants. 2) A type of insurance which will step in to take the place of insurance that has not been effected due to a mistake or forgetfulness on the part of the policyholder. Issued to risks such as mortgage concerns, professionals, semi-professionals or others engaged in the routine insurance of many properties. 3) A clause in certain policies whereby the insurer agrees to waive its defenses when an honest error has been committed, provided it is corrected when discovered.
Expediting Expenses - Money spent to speed up the repair or replacement of destroyed or damaged property.
Extra Expense Insurance - A form of insurance policy covering the extra expense of an insured in carrying on a business following a loss by an insured peril.
Glossary | F
Flood - Overflow of water from its natural boundaries. General and temporary condition of partial or complete inundation of normally dry land areas from the overflow of inland or tidal waters or from the unusual and rapid accumulation or runoff of surface waters from any source.
Glossary | G
Gross Earnings Form - A business Interruption form of insurance under which the insured's gross earnings are insured.
Glossary | H
Hold Harmless Agreement - A contract or agreement in which one party assumes legal responsibility for the acts of another.
Glossary | I
Indemnify - To provide compensation for loss or expenses incurred.
Insured - The entity (individual or otherwise) whose risk of financial loss from an insured peril is protected by the insurance policy.
Insurer - The company providing the insurance coverage.
Glossary | L
Legal Expense Insurance - A form of insurance to cover types of legal expenses incurred by individuals; often written on a group basis.
Legal Liability - Liability imposed by law on individuals or corporations to pay for harm done to others. Legal Liability may also be assumed under the terms of a contract.
Liability Insurance - Insurance which agrees to indemnify the insured for sums he/she may be required by law to pay third parties as damages for bodily injury or damage to property.
Limit of Insurance - The limit of payment for which an insurer is liable under a policy.
Loss Payable Clause - A policy clause providing, at the direction of the insured, that in the event of a loss, payment shall be made to an interested party other than the insured, e.g., a mortgagee.
Glossary | M
Malpractice - A performance by a professional which is deficient in skill from what might ordinarily be expected of a professional person.
Material Fact - Something affecting a contract of insurance important enough to change an agreement between the company and the policyholder. Material facts must be disclosed if asked about.
Medical Payments Insurance - A provision in an insurance policy to pay certain specified medical expenses of others irrespective of the insured's legal liability.
Misrepresentation - An incorrect statement made about a material fact.
Money and Securities - An all-risks policy protecting against loss of money and securities.
Glossary | O
Occurrence - A happening or event. Liability policies are usually written on either an accident or occurrence basis.
Owner's and Contractor's Protective Liability Insurance - Liability insurance coverage which gives protection against liability arising out of the work performed by independent contractors on behalf of owners or contractors.
Owner's, Landlord's and Tenant's Liability - Liability insurance coverage which gives protection because of liability arising out of ownership, use or occupancy; operation or maintenance of building or premises.
Glossary | P
Personal Injury Liability - Injury other than bodily injury arising out of defined causes which usually include false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander or violation of a person's right to privacy other than in the course of advertising, broadcasting, television, publishing.
Prior Acts Coverage - Liability insurance coverage for claims arising from acts that occurred before the beginning of the policy period.
Professional Liability Insurance - Protects professionals against liability for damages and cost of defense based upon his/her alleged or real professional errors and omissions or mistakes, e.g., architects, engineers, medical malpractice, attorneys.
Property Damage Liability Insurance - Protection against liability for damage to the property of another including loss of use of the property.
Glossary | R
Replacement Cost - In the event of a loss, repairs or replacement will be made with material of like kind without cost to the insured for depreciation or betterment.
Robbery - The taking of another's property by force or threat of force.
Glossary | S
Self Insured Retention (SIR) - Similar to a deductible except: 1) the insurer only responds to claims in excess of the SIR limit and 2) the limit of protection specified in the policy is in addition to the limit of the SIR and 3) in the event of a claim from a third party, the insured is responsible for making payment to the limit of the SIR directly to the third party.
Glossary | T
Theft - The wrongful taking of the property of another. It is a broad term and includes larceny, pilfering, hold-up, robbery and pick-pocketing.
Third Party Insurance - The insured is indemnified with respect to any loss which he/she might suffer as a result of his/her legal liability to others arising out of the peril against which the insurance is written.
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