Insurance Terms

ABANDONMENT:   Giving up the proprietary rights in insured property to the Underwriter in exchange for payment of a constructive total loss.

ACCIDENT:  A fortuitous event, unforeseen and unintended.

ACCIDENT INSURANCE:  A form of health insurance against loss by bodily injury.

ACCOUNTS RECEIVABLE POLICY:  An inland marine (also burglary) policy written to protect the insured from financial loss due to his inability to collect amounts owed him because of the destruction of his records.

ACT OF GOD:  A flood, an earthquake or other accident or event that is without any human intervention and that could not have been prevented by reasonable care or foresight but is the result of natural causes.

ACTUAL CASH VALUE:  The sum of money required to pay for damages or lost property, computed on the basis of replacement value less its depreciation by obsolescence or general wear.

ACTUAL TOTAL LOSS:   Occurs when:
   (1) the insured property is completely destroyed or
   (2) the Assured is irretrievably deprived of the insured property or
   (3) cargo changes in character so that it is no longer the thing that was insured or
   (4) a ship is posted "missing" at Lloyd's, in which case both the ship and its cargo are deemed to be an actual total loss.

ADDITIONAL INSURED:  A person or firm or corporation other than the named insured on a policy or mortgage company named in a mortgagee clause, who is protected against loss by the terms of the policy or mortgage company named in the mortgage clause.

ADJUSTER:  An individual representing the insurance company and acting for the company in working on agreements as to the amount of a loss and the liability of the company in same.

ADVERTISING INJURY:  This coverage pays for damages done in the course of oral or written advertisement that disparages libels or slanders a person's or organization's goods, products or services. Coverage for these offenses is provided under advertising injury coverage only if they occur during the course of advertising the named insured's own goods, products or services.

ADVERSE SELECTION:  Selection against the insurance company; the tendency of more poor risks to buy and maintain insurance than good risks.

AGREED VALUE:  When the agreed value option is used the coinsurance requirement is removed and the insurer agrees to cover loses for it's agreed value.

ALL RISK:  Insurance against loss or damage to property arising from any fortuitous cause, except such as may be specifically excluded.

ALTERATIONS/NEW BUILDINGS:  Alterations/New Buildings provides coverage for loss of income resulting from a delay in beginning operations. The delay must be the result of damage to new buildings or structures, either completed or under construction. Damage to additions or alterations to existing buildings are also covered. The damage must be the result of a covered cause of loss.

ANY AUTOMOBILE:  Coverage is provided for any auto, including autos owned by the insured, autos the named insured hires or borrows from others, and other non-owned autos used in the insured's business.

APPRAISAL:  A survey of property made for determining its insurable value or the amount of loss sustained.

ASSIGNMENT:   The passing of beneficial rights from one party to another.

ASSIGNED RISK:  A risk which underwriters do not care to insure, but because of state law or otherwise, the insured must be protected and the insurance is therefore handled through the state and assigned to companies.

ASSUMED LIABILITY: Liability which would not rest upon a person except that he has accepted responsibility by contract expressed or implied. This is also known as contractual liability.

AUTOMOBILE FLEET POLICY:  A commercial automobile policy covering five or more automobiles.

AVERAGE:   A marine partial loss. This can be particular average or general average (see below).

AVERAGE CLAUSE:   A clause in a marine insurance policy, whereby partial losses are subject to special conditions (e.g. a franchise or deductible is to be applied to claims).

BAILEE:  A person or concern having possession of property committed in trust from the owner.

BAILEE'S CUSTOMERS POLICY:  A policy providing for loss or damages to property of bailee's customers, payable either to bailees for their account or direct to customers.

BASIC COVERAGE FORM:  Any of the commercial or personal insurance property forms which provide basic coverages. These forms generally provide the most limited coverage, which is surpassed by "Broad Forms" and "Special Forms."

BASIC COVERAGE:  This coverage can be written under the small business form to cover boilers and vessels equipment, including or excluding air conditioners/compressor units.

BASIC RATE:  The manual rate, from which are taken discounts or to which are added charges to compensate for the individual circumstances of the risk.

BENEFIT OF INSURANCE CLAUSE:   A clause by which the bailee of goods claims the benefit of any insurance policy effected by the cargo owner on the goods in care of the bailee. Such a clause in a contract of carriage, issued in accordance with the Carriage of Goods by Sea Act, is void at law.

BID BOND:   Bond required of a contractor submitting the lowest bid on a project. If the contractor then refuses to undertake the project, the bid assures that the developer will be paid the difference between the lowest bid and next lowest bid. The bid bond encourages contractors to make serious bids and live up to their obligations.

BILL OF LADING:   Contract of carriage and receipt for goods, issued by carrier.

BINDER:  (Or Binding Receipt):  In lines other than life and health, a binder is an acknowledgement (usually from the agent) that insurance applied for is in force whether or not premium settlement has yet been made or the policy issued. In life and health insurance, binders are not issued, but if premium settlement is made with the application, what is often erroneously referred to as a "binder" is issued. Actually this is a conditional binding receipt.

BLANKET INSURANCE:  (1) Property-liability insurance that covers more than one type of property in one location in one policy or form instead of under separate items, or one or more types of property at more than one location; (2) A contract of health insurance that covers all of a class of persons not individually identified.

BODILY INJURY ACCIDENT:  This amount is the most an insurer will pay under coverage (B) for all claims arising from any one accident, regardless of how many employees are involved in the accident. The standard limit is $100,000 for any one accident, which can be increased.

BODILY INJURY BY DISEASE(POLICY LIMIT):  This is the aggregate limit the insurer will pay under coverage (B) for all claims sustaining bodily injury by disease during the policy period. The standard policy limit is $500,000, which can be increased.

BODILY INJURY BY DISEASE(EACH EMPLOYEE):  This amount is the most an insurer will pay under coverage (B) for damages due to bodily injury by disease to any one employee. The standard limit of liability for each employee is $100,000, which can be increased.

BODILY INJURY LIABILITY:  The liability which may arise from injury or death of another person.

BOILER AND MACHINERY POLICY:  Insurance against loss due to accidents to boilers, pressure vessels or other machinery including the equipment itself, as well as liability arising out of the accident.

BOND:  An obligation of the insurance company to protect one against financial loss caused by acts of another.

BROAD COVERAGE FORM:  This coverage is also written under the small business policy. Many insured's refer to this form as the comprehensive form for small business since it covers a broader range of equipment. Coverage is provided for any boiler, any fired or unfired pressure vessel, any refrigeration or air conditioning equipment, and any mechanical or electrical equipment. Only certain types of business can qualify for the small business policy and property values can be no more than $5 million.

BUILDER'S RISK COVERAGE FORM:  A commercial property coverage form specifically designed for buildings in the course of construction.

BUILDER'S RISK INSURANCE:  Insurance against loss to buildings or structures in the course of construction.

BUILDINGS and BUSINESS PERSONAL PROPERTY:  Coverage for the building includes the building and structures, completed additions to covered buildings, outdoor fixtures, permanently installed fixtures, machinery and equipment. The building material used to maintain and service the insured's premises is also insured. Business Personal Property owned by the insured and used in the insured's business is covered for direct loss or damage. The coverage includes furniture and fixtures, stock, and several other similar business property items when not specifically excluded from coverage. The policy is also designed to protect the insured against loss or damage to the personal property of others while in the insured's care, custody or control.

BUILDINGS AND PERSONAL PROPERTY COVERAGE FORM:  A commercial property coverage form designed to insure most types of commercial property (buildings or contents or both). It is the most frequently used commercial property form, and has replaced the General Property Form, Special Building Form, Special Personal Property Form, and others.

BUSINESS AUTO COVERAGE FORM:  The latest commercial Automobile Insurance coverage form, which may be written as a monoline policy or as part of a commercial package. This form has largely replaced the Business Auto Policy.

BUSINESS INCOME:  This endorsement can be written to provide coverage on either a "valued" or an "actual loss sustained" basis. When the actual loss sustained option is used, the coverage pays only for the insured's actual loss of income. If coverage is written using the valued option, the insured is able to collect a predetermined amount of coverage for each day the business is interrupted because of an accident to an insured object. The coverage is subject to a per accident limit and a deductible that can be expressed as either a specified time period or a dollar amount. When the valued form is used the daily amount of insurance is paid regardless to the actual amount of loss.

BUSINESS INCOME COVERAGE FORM:  A commercial property form providing coverage for "indirect losses" resulting from property damage, such as loss of business income and extra expenses incurred. It has replaced earlier Business Interruption and Extra Expense forms.

BUSINESS INTERRUPTION INSURANCE:  A type of policy that pays for loss of earnings when operations are curtailed or suspended because of property loss.

BUSINESS LIABILITY:  The term used to describe the liability coverages provided by the Businessowners Liability Coverage Form. It includes liability for bodily injury, property damage, personal injury, advertising injury, and fire damage.

BUSINESS PERSONAL PROPERTY:  Traditionally known as "contents," this term actually refers to furniture, fixtures, equipment, machinery, merchandise, materials, and all other personal property owned by the insured and used in the insured's business.

BUY-SELL AGREEMENT:   If an owner of the business dies, the business may need to buy the deceased owners shares in the business.

C & F:   A sale term relating to goods. Cost and Freight. The consignee makes his own insurance arrangements for the goods throughout the period of transit.

CARRIER:  (1) An insurance company which "carries" the insurance. (The terms "insurance company" or "insurer" are preferred because of the possible confusion of "carrier" with transportation terminology). (2) In transportation, the trucker, air carrier, ocean steamship company or other entity which moves the goods. (See "Contract Carrier)

CASUALTY INSURANCE:  That type of insurance that is primarily concerned with losses caused by injuries to persons and legal liability imposed for such injury or for damage to property of others. It also includes such diverse forms as Plate Glass, insurance against crime, such as robbery, burglary or forgery, Boiler and Machinery insurance, and Aviation insurance. Many casualty companies also write surety business.

CAUSES OF LOSS:  The term peril is used when discussing losses. A peril is a cause of loss. Basic property insurance policies are written to cover the perils of fire, lightning, explosion, windstorm, hail, smoke, aircraft or vehicle damage, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. Other property insurance policies, often referred to as the broad form policy, add coverages for water damage, weight of snow, ice or sleet, breakage of glass and coverage for falling objects. The broadest coverage is the special form, which is best known as the all risk form. All risk covers all causes of loss, except those specifically excluded from coverage. It is possible for a commercial property policy to have more than one cause of loss form.

CIVIL AUTHORITY: Civil Authority is when access to an insured's premises is denied by civil authority as the direct result of damage or destruction of a neighboring or adjacent property belonging to others. If the damage or destruction is caused by a cause of loss covered by the insured's policy, this coverage would apply. The insured's premises would be covered for the loss of income during the period of suspension, up to a maximum of two weeks.

CLAIMS-MADE COVERAGE: A policy providing liability coverage only if a written claim is made during the policy period or any applicable extended reporting period. For example, a claim made in the current reporting year could be charged against the current policy even if the injury or loss occurred many years in the past. If the policy has a retroactive date, an occurrence prior to that date is not covered. (Contrast this with "Occurrence Coverage)

CLASSIFICATION CLAUSE (CARGO):   A clause in a cargo insurance open cover which details the minimum classification for an overseas carrying vessel that is acceptable to the insurers for carriage of the insured goods at the premium rate/s agreed in the contract. Goods carried by lower class vessels are accepted under the open cover, subject to payment of an additional premium.

COINSURANCE:  (1) In property insurance, a clause under which the insured shares in losses to the extent that he is underinsured at the time of loss. (2) In health insurance, a provision that the insured and insurance company will shared covered losses in agreed proportion. In health insurance, the preferred term is "percentage participation."

COLLISION COVERAGE:  This coverage provides protection against loss or damage to a covered auto or a non-owned auto resulting from the impact with another vehicle or object. Collision losses are paid regardless of fault.

COMMERCIAL GENERAL LIABILITY (CGL) COVERAGE PART:  General liability coverage which may be written as a monoline policy or part of a commercial package. "CGL" now means commercial general liability forms which have replaced the earlier "comprehensive" general liability forms. The latest forms include all sublines, provide very broad coverage, and two variations are available, "Occurrence," and "Claims Made," coverage.

COMPREHENSIVE COVERAGE:  Traditional name for physical damage coverage for losses by fire, theft, vandalism, falling objects and various other perils. On Personal Auto Policies this is now called "other than collision" coverage. On commercial forms, it continues to be called "comprehensive coverage."

COMPREHENSIVE GENERAL LIABILITY POLICY:  A policy covering a variety of general liability exposures, including Premises and Operations (OL&T or M&C), Completed Operations, Products Liability, and Owners and Contractors Protective. Contractual Liability and Broad Form coverages could be added. In most jurisdictions the "Comprehensive General Liability Policy" has been replaced by the newer "Commercial General Liability (CGL) forms which include all the standard and optional coverages of the earlier forms.

COMPREHENSIVE PERSONAL LIABILITY POLICY (CPL):  A personal liability contract. It provides personal liability coverage for the individual and family needs arising out of numerous personal activities and situations, such as the ownership of residential property, ownership of pets, sports activities, and many other everyday activities.

COMPUTER FRAUD:  Computer fraud is a specialized kind of theft where a computer is used to steal property from it's rightful owner.This form covers money and securities and property other than money and securities.

CONDITIONALLY RENEWABLE:  A contract of health insurance that provides that the insured may renew the contract to a stated date or an advanced age, subject to the right of the insurance company to decline renewal only under conditions defined in the contract.

CONSEQUENTIAL LOSS:  A loss arising indirectly from an insured peril.

CONSTRUCTIVE TOTAL LOSS:  A partial loss of sufficient degree to make the cost of repairing more than the property is worth.

CONTRACT CARRIER:  A transportation company which carries the goods of only certain customers and not the public in general as in the case of a common carrier.

CONTRACTUAL LIABILITY:  Liability assumed under any contract or agreement. Coverage is generally limited in liability policies, but in most cases may be provided for an additional premium.

CONTRIBUTION:   The term relates to circumstances where more than one party covers the risk. Each party is deemed to be liable for his proportion of the loss. If the Assured recovers in full from one insurer, that insurer is entitled to recover from the other insurer for that part of the loss which should have been paid by the latter. The term is used in marine insurance, also, in relation to contributions paid by the Assured in connection with salvage and/or general average.

CONSEQUENTIAL DAMAGE:   This endorsement covers loss due to spoilage of specified property from lack of power, light, heat, steam or refrigeration, which results from an accident to an insured item.

CONTRIBUTORY VALUE:   The value on which a contribution to a general average loss or salvage award is calculated.

COUNTRY DAMAGE:  Marine term referring to damage to baled or bagged goods (e.g. cotton) caused by excessive moisture from damp ground or exposure to weather, or by grit, dust or sand forced into the insured property by windstorm or inclement weather.

COVER:  (1) A contract of insurance; (2) To effect insurance; (3) To include within the coverage of a contract of insurance.

COVERAGE EXTENSIONS and ADDITIONAL COVERAGES:  In addition to the limits stated in the Building and Personal Property coverage form, the policy has a coverage extensions section and an additional coverages section. The coverage extensions section provides limited coverage for newly acquired or constructed property, property of others, certain outdoor property, and the cost to research and reconstruct information on destroyed records. When coverage is placed on the all risk form, two additional extensions are added for property in transit and coverage for certain repair costs related to damage caused by water. The two additional extensions are covered by certain perils only. The additional coverage section provides coverage for indirect losses that result from a direct loss. The coverage applies to removal of debris, preservation of property, fire department service charges and pollutant cleanup and removal. The coverage extensions and the additional coverages have limitations and are subject to certain conditions.

COVERAGE PART:  Any one of the individual commercial coverage parts that may be attached to a commercial policy.

COVERAGE TRIGGER:  A mechanism that determines whether a policy covers a particular claim for loss. For example, the difference between the coverage triggers of liability "occurrence" forms and "claims made" forms is that the loss must occur during the policy period in the first case and the claim must be made during the policy period in the second case.

DEDUCTIBLE:  The standard deductible is $250. Coverage can be written with more than one deductible. The insured can choose one deductible for a group of covered items and a different deductible for all other items. If a loss occurs involving more than one covered item, the higher deductible would apply.

DEPRECIATION:  Decrease in the value of property over a period of time due to use, wear, tear, and obsolescence.

DIRECT OR HELD COVERED:   A condition requiring that the insured voyage be direct from one place to another. If the voyage is delayed en route or there is a deviation from the direct route the insurance cover continues subject to payment of an additional premium, but only if the Assured gives prompt notice of such delay or deviation immediately on receipt of advices, unless the policy provides otherwise.

DISABILITY INSUANCE:   Disability insurance would provide income in the event that you were disabled and could not continue to work.

DISCLOSURE:   The duty of the Assured and his broker to tell the Underwriter every material circumstance before acceptance of the risk.

DISCOVERY PERIOD:  The time allowed the insured after termination of certain bond and policy provisions to discover that he has sustained a loss which occurred during the period covered by the contract.

DUTY OF ASSURED CLAUSE:  This appears in the Institute Cargo Clauses published for use with the MAR form of policy. It directs the attention of the Assured, his agents, etc. to the duty (as required by the MIA, 1906) to take reasonable measures to avert or minimize any loss which is recoverable under the policy; also to ensure that all rights against carriers and others are properly preserved and exercised. Underwriters agree to reimburse the Assured for any reasonable expenditure incurred by his compliance with the clause; in practice, these expenses are termed "sue and labor" charges (see Sue & Labor).

EARTHQUAKE COVERAGE:  This endorsement extends your cause of loss to include damage that results directly from an earthquake. Coverage is provided for replacement of buildings only. All earthquake shocks that occur within a 168 hour period (one week) are considered to be a single occurrence. A separate deductible applies and is determined by the value of the insured property.

EARNED PREMIUM:  That portion of a premium for which the policy protection has already been given during the now-expired portion of the policy term.

EACH OCCURRENCE:  Each occurrence is considered to be an accident, which could include continuous or repeated exposure to the same harmful conditions. An occurrence can also be a sudden event, or a result of a long term series of events.

EFFECTIVE DATE:  The date on which an insurance policy or bond goes into effect, and from which protection is furnished.

ELECTRONIC DATA PROCESSING COVERAGE (EDP):  Specialized type of insurance designed to cover computer equipment, data systems, information storage media, and expense or income losses related to EDP losses.

ELIMINATION PERIOD:  A loosely-used term sometimes designating the waiting period and sometimes the probationary period.

EMPLOYEE DISHONESTY:   Employee dishonesty is considered to be a criminal act committed by an employee acting alone or in collusion with others. There must be intent by the employee to cause the employer a loss and to obtain a financial benefit for the employee or someone else. Coverage is provided for dishonest acts of employees of the named insured only. Coverage insures against loss of money, securities, and property other than money and securities. The blanket form provides coverage for dishonest acts of all employees. The limit for blanket coverage applies per loss, regardless of how many employees are involved. The scheduled form provides coverage only for the dishonest acts of employees specifically listed in the policy. On the scheduled form, a separate limit applies to each employee listed on the schedule.

EMPLOYERS LIABILITY INSURANCE:  Coverage against common law liability of an employer for accidents to employees, as distinguished from liability imposed by workers compensation law.

EMPLOYERS NON-OWNERSHIP AUTOMOBILE LIABILITY:  (1) Liability arising out of the operation of an automobile not owned by the insured. This frequently results when an employee uses his own personal car in the business activities of the insured; (2) Insurance coverage for the liability exposure mentioned above.

ENDORSEMENT:  A form attached to the policy bearing the language necessary to change the terms of the policy to fit special circumstances.

ENGLISH JURISDICTION CLAUSE:   A condition, printed in the MAR form of policy, whereby Underwriters agree to recognize judgments only from courts convened within English jurisdiction. Subscribing Underwriters may agree to replace this clause with a foreign jurisdiction clause. Please note this is not applicable to business emanating from the United States of America which is subject to the Service of Suit Clause (USA) appearing in the Standard Conditions.

ENGLISH LAW AND PRACTICE:   This clause appears in Institute clauses published for use with the MAR form or policy. It applies where a foreign jurisdiction clause attaches to the policy and requires that the foreign court shall base its decisions on English law and practice.

EXECUTIVE OFFICERS, PARTNERS EXCLUSION ENDORSEMENT:  In some states, workers compensation law allows an insured to include or exclude Executive Officers and Partners, or both, from coverage. Adding this endorsement can designate the individuals not covered under the policy.

EXTRA EXPENSE:  This endorsement pays for the extra expense of maintaining operations after an accident to an insured item until normal operations can be restored. This endorsement excludes coverage for loss of income. To have coverage for loss of income and extra expense, the endorsement called combined business interruption and extra expense must be added to the policy.

EXTRA EXPENSES:  Extra Expenses are any expenses over and above those that would have been incurred during normal operation of the business. Some of the covered extra expenses are; expenses incurred to avoid or minimize the suspension of operations, expense to repair or replace property, and expense paid for overtime work to speed up the restoration of the business.

EXPERIENCE:  The loss record of an insured,  class of coverage, or of an insurance company.

EXPERIENCE MODIFICATION:  This is a factor that deals with the rating of the policy. The Experience Modification figure is based on the insured's loss experience. The factor is used to increase or decrease the manual rates of insurance.

EXPOSURE:  (1) State of being subject to the possibility of loss; (2) extent of risk as measured by payroll, gate receipts, area, or otherwise; (3) possibility of loss to a risk being caused by its surroundings.

EXTENDED BUSINESS INCOME:  This coverage provides the time needed for the insured's former customers to return once the business suspension is over by providing coverage for loss of income until sales return to normal, or up to a maximum of thirty days.

EXTENDED COVERAGE ENDORSEMENT:  A specific endorsement attached to a Standard Fire policy, usually providing coverage of windstorm, hail, explosion, riot, riot attending civil strike, aircraft, vehicular damage, smoke and civil commotion.

EXTENDED REPORTING PERIOD (ERP):  A period allowed for making claims after expiration of a "claims made" liability policy. Also known as a "tail."

EXTENDED PERIOD of INDEMNITY: Extended Period of Indemnity is an option that extends the "extended business income coverage" over the standard thirty-day period. The insured can extend the coverage to 60 days, or up to a maximum of 360 days. The selected time would depend on the time the insured estimates it would take for revenues to return to normal after a suspension of the business.

EXTORTION:   Extortion is the surrender of property away from the premises as a result of a threat of bodily harm to someone who is, or allegedly is, being held captive. This form covers money and securities and property other than money and securities.

FAS:   Incoterm meaning “Free Alongside Ship"

FAC:   Incoterm meaning "Free Carrier"

FOB:   Incoterm meaning "Free On Board"

FPA:   Free of Particular Average (see Average or Particular Average)

FIDELITY BOND:   A bond which will reimburse an employer for loss up to the amount of the bond, sustained by an employer (the insured) by reason of any dishonest act of an employee (or employees) covered by the bond.

FIRE:   Combustion sufficient to product a spark, flame or glow and which is hostile (as opposed to friendly - i.e. not in the place where it is intended to be as in a furnace or fireplace.)

FIRE DAMAGE LIMIT:   The fire damage limit provides coverage for fire damage caused by negligence on the part of the insured to premises rented to the named insured. If a fire occurs because of negligence of the insured and causes damage to property not rented to the insured, coverage would be provided under the occurrence limit.

FIRE INSURANCE:   (1) Insurance contracts that indemnify an insured for loss caused by the destruction of the insured's property resulting from a fire; (2) The field of insurance that provides insurance policies on the insured's property for a variety of perils, including fire.

FIRST NAMES INSURED:   The first named insured appearing on a commercial policy. The latest forms permit the insurer to satisfy contractual duties by giving notice to the "first" named insured rather than requiring notice to all named insureds.

FLOATER POLICY:   A policy under the terms of which protection follows moveable property, covering it wherever it may be.

FORGERY or ALTERATION:   Forgery is generating a document or signature that is not genuine.Alteration is changing a document in a manner that is neither authorized nor intended.This form insures against loss caused by the forgery or alteration of a covered item drawn against the insured's accounts. A covered item might be a check, draft, promissory note, bill of exchange or similar instrument.

FRANCHISE:   A provision in freight insurance conditions which exempts the insurer from particular average losses, in any one accident, under 3%. The provision is waived if the loss is caused by fire, or by the ship stranding, sinking or being in collision.

FREIGHT:   (1) Goods moved for another or, (2) The remuneration earned by a shipowner or manager for the carriage of goods; including the profit derived from carrying his own goods.

GARAGEKEEPERS LEGAL LIABILITY POLICY:   Coverage for losses for which the insured is legally liable, caused by fire or explosion, theft of an entire vehicle, riot and vandalism, collision, and upset to automobiles in his care, custody and control.

GARAGE LIABILITY POLICY:   A liability contract designed to provide the owner of a garage operation with the liability protection needed for the special hazards that exist there.

GENERAL AGGREGATE LIMIT:   A Commercial General Liability limit that applies to all damages paid for bodily injury, property damage, personal injury, advertising injury, and medical expenses, except damages included in the products-completed operations hazard.

GENERAL AVERAGE:   An Ocean Marine coverage meaning a partial loss which has resulted from the voluntary and deliberate sacrifice of some cargo for the benefit of all concerned, and which must be shared by all parties (owners of ship, cargo and freight) in proportion to their interest. For example, if 100 containers were jettisoned from a 1000 container load in order to protect the ship, the owners of the remaining 900 containers, the owners of the ship, and the owners of the freight would all contribute to offset the losses of those whose cargo was jettisoned for the benefit of the whole.

GENERAL AVERAGE CONTRIBUTION:   The proportion paid or payable by a saved interest involved in a general average act.

GENERAL AVERAGE DEPOSIT:   Paid by a consignee to obtain release of the cargo from the carrier following a general average act. This may be replaced by an Underwriter's guarantee.

GENERAL AVERAGE GUARANTEE:   Paid by a consignee to obtain release of the cargo from the carrier following a general average act. This may be replaced by an Underwriter's guarantee.

GENERAL AVERAGE IN FULL -aka- G-A IN FULL:   An agreement in a cargo insurance whereby Underwriters do not reduce a claim for general average contribution in event of underinsurance.

GENERAL EXCLUSION CLAUSE:   A clause in the Institute Cargo Clauses 1982, which specifies risks that are excluded, irrespective of the risks covered elsewhere in the wording.

GLASS COVERAGE FORM:   A commercial property form used to insure plate glass, lettering, frames and ornamentation. It has replaced earlier commercial glass insurance forms.

GOOD FAITH:   A basic principle of insurance. The Assured and his broker must disclose and truly represent every material circumstance to the Underwriter before acceptance of the risk. A breach of good faith entitles the Underwriter to avoid the contract. (Proposed changes in law may affect this definition - also see "Utmost Good Faith".)

GROUP HEALTH INSURANCE PLANS:   These plans provide comprehensive health. Riders are available for dental, vision, preventive care, hearing, mental, life, and percription drugs. Deductibles can range from $100.00 to $1000.00. Office visit group co-payment avaliable at $10.00, $15.00and $20.00. Your group can qualify for coverage with as little as two employees!

HAZARD:   A specific situation that increases the probability of the occurrence of loss arising from a peril, or that may influence the extent of the loss. For example, accident, sickness, fire, flood, liability, explosion are perils. Slippery floors, unsanitary conditions, shingled roofs, congested traffic, unguarded premises, and uninspected boilers are Hazards.

HELD COVERED:   A provisional acceptance of risk, subject to confirmation at a later date that the agreed cover is needed. Where applicable to an existing insurance, cover is conditional, in practice, on prompt advice to the Underwriter as soon as the Assured is aware of the circumstances to be held covered coming into effect, and a reasonable additional premium is payable if the risk held covered comes into effect.

HIRED AUTO:   Coverage is provided only for autos leased, hired, rented or borrowed for use in the named insured's business.

HOLD-HARMLESS AGREEMENT:   A contractual arrangement whereby one party assumes the liability inherent in a situation, thereby relieving the other party of responsibility. Such agreements are typically found in contracts like leases. A typical lease may provide that the lessee must "hold harmless' the lessor for any liability from accidents arising out of the premises.

ICC CLAUSES:   (see Institute Cargo Clauses)

INDEMNIFY:  To restore the victim of a loss, in whole or in part, by payment, repair or replacement.

INDEMNITY: This is the insuring agreement clause found in most umbrella policies as opposed to the pay on behalf agreement. When the indemnity insuring clause is used, the insurer will indemnify or reimburse the insured for those sums of money the insured becomes obligated to pay by reason of liability imposed upon the insured by law, or assumed under contract.

INDEMNITY BOND:  A bond which indemnifies the obligee against loss which arises as a result of failure on the part of a principal to perform.

INDEPENDENT CONTRACTOR:  One who agrees to perform according to a contract and who is not an employee.

INFLATION GUARD:  An insured can insure a building for its full value at the beginning of the policy year, but, at the end of the year, it might not be covered for it's full value. This problem can be corrected by adding inflation guard coverage. With inflation guard, the policy limit increases gradually during the policy term so that the total increase amounts to the desired percentage increase at the end of the policy term.

INHERENT VICE:  A defect or cause of loss arising out of the nature of the goods in question.

INLAND MARINE INSURANCE:  A branch of the insurance business which developed from the insuring of shipments which did not involve ocean voyages. Exposures eligible for this form of protection are described in the nationwide definition of Marine Insurance. Such diverse properties as bridges, tunnels, jewelry, and furs can now be written under Inland Marine forms.

INSTITUTE CARGO CLAUSES:   Treaty wordings developed by the International Chamber of Commerce. There are three basic sets of these clauses (A, B and C). The A clauses cover "all risks", subject to specified exclusions. The B and C clauses cover specified "risks", subject to specified exclusions. (See actual ICC Clauses treaty wordings via "Ocean Reference" link at left.)

INSURABLE RISK:  A risk which meets most of the following requisites: (1) The loss insured against must be defined; (2) It must be accidental; (3) It must be large enough to cause hardship to the insured; (4) It must belong to a homogenous group of risks large enough to make losses predictable; (5) It must not be subject to the same loss at the same time as a large number of other risks; (6) The insurance company must be able to determine a reasonable cost for the insurance; (7) The insurance company must be able to calculate the chance of loss.

JOINT LIFE POLICY:   Pays the insurance amount when the first of two or more covered persons dies.

KEY MAN (KEY EMPLOYEE) INSURANCE POLICY:   An insurance policy on the life of a key employee whose death would cause the employer financial loss, owned by and payable to the employer.

KNOWN LOSS:   A loss known to one or both parties when a broker and Underwriter are negotiating a placing.

LABOR and MATERIALS BOND:   The coverage to indemnify an owner for whom work was done if the completed work is not free of worker’s liens for labor and materials.

LEASE:   Contract whereby the owner or user of property (the lessor) agrees to let another party, (the leasee) use the property for a consideration (money or rent).

LEASEHOLD INSURANCE:   Insurance for the tenant of a property leased against the loss of value of the lease or of profit from a sub-lease through termination of the lease by fire or other peril insured against.

LIABILITY:   Broadly, any legally enforceable obligation.

LIABILITY INSURANCE:   That insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.

LIABILITY LIMITS:   The sum or sums beyond which a liability insurance company does not protect the insured on a liability policy.

LIFE INSURANCE:   Level term insurance provides low cost life insurance. You pay a level premium for a specified term. Some term policies are guaranteed convertible to a universal or whole life insurance policy. Universal life insurance builds cash values, and provides life insurance at the same time. This policy provides coverage for a lifetime. Contractual agreement can be attached to life insurance policies to accommodate business needs. Examples of this are Key Person or Buy-Sell Agreement.

LIMITS OF INSURANCE:   All umbrella liability policies contain an each occurrence limit of insurance. Some umbrella liability policies may have a separate limit that applies to all personal and advertising injury for one person or for the organization. Also, some policies are written with aggregate limits for only one type of loss. Other policies may have one or more aggregates for all losses. Umbrella policies can be written with several different variations of the aggregate limits. There are no standard umbrella policies.

LOCATION CLAUSE:   Used in cargo open covers this limits Underwriters' liability in any one location.

MAJOR MEDICAL INSURANCE:   This covers in excess of that provided by a basic hospital medical insurance plan. After the limits of coverage have been exhausted under a basic plan, major medical then covers medical expenses related to room and board, operating room expenses, etc;. There may be a lifetime limit given by the insurance company.

MALICIOUS DAMAGE CLAUSE:   A clause published by the Institute of London Underwriters for use in a cargo policy that is subject to the Institute Cargo Clauses (1982) B or C. It adds the risks of malicious acts, vandalism and sabotage to the cargo policy.

MANUAL RATES:   Usually the published rate for some unit of insurance. An example is the Workers Compensation Manual where the rates shown apply to each $100 of the payroll of the insured, $100 being the unit.

MAR POLICY:   A market term for the form of marine policy used by Lloyd's and the London company market. It is a basic contract form to which the conditions agreed by the insurers subscribing a marine insurance contract are attached.

MARKET VALUE CLAUSE:   A provision that may be used in property damage insurance form covering some risks which obligates the insurance company, in the event of loss, to pay the established cash selling price of the destroyed or damaged stock, rather than the actual case value as provided in the Standard Fire Policy.

MAXIMUM PERIOD of INDEMNITY:  Maximum Period of Indemnity is a restriction of the period of restoration provided under the policy. If this option is selected the insured's loss payment is limited to the lesser of (1) the amount of loss sustained during the 120 days immediately following the loss or (2) the policy limit. The coinsurance requirement does not apply if this option is chosen.

MEDICAL EXPENSE LIMIT:   Medical payments coverage pays medical expenses resulting from bodily injury caused by an accident on premises owned or rented by the insured, or locations next to such property, or when caused by the insured's operations. These payments are made without regard to the liability of the insured.

MEDICAL PAYMENT COVERAGE:   The insuring agreement states that the insurer will pay all reasonable and necessary medical and funeral expenses incurred by an insured because of bodily injury caused by an accident. The insured is the named insured, the insured's employees and guests, and any other person occupying a covered auto. These payments are made without regard to fault.

(MSA) MEDICAL SAVINGS ACCOUNT:   The MSA plans help self-employed sole proprietor take control of their health care expenses with a tax-free savings account and major medical insurance. Money deposit in the MSA helps to pay the high deductible is met the insurance starts paying. MSA contributions are 100% tax deductible from gross inscome. In 2003 the premiums will be 100% tax deductilbe. Medical withdrawls are 100% tax-free. Interest is tax deferred, if used for qualifying medical exspenses, tax-free.

MINIMUM PREMIUM:   The smallest premium which an insurance company will accept for writing a particular policy or bond for a designated period.

MONOPOLISTIC STATES:   There are six states that require all workers compensation insurance to be placed with their state fund. No private insurer is allowed to write Workers Compensation Coverage in the six states. The states are North Dakota, Ohio, Washington, Wyoming and West Virginia.

MONTHLY LIMIT of INDEMNITY:  Monthly Limit of Indemnity is an option that allows the insured to recover a percentage of the actual policy limit during each thirty day period of interrupted operations. If a loss occurs, payment would be made for the lesser of the actual amount of the loss, or the maximum amount allowed to recover with this option. Under this option, the coinsurance requirement does not apply.

MOTOR TRUCK CARGO - OWNER'S FORM:   This form insures the owner of a truck against loss to his own property while being transported. It pays for the loss or damage of cargo for the perils insured against, regardless of the legal liability.

MOTOR TRUCK CARGO - TRUCKER'S FORM:   This form indemnifies the policyholder, a trucker, for loss or damage resulting from his legal liability as a carrier while transporting the property of others. I does not insure against any loss for which he is not legally liable.

NAMED INSURED:   Any person, firm, or corporation, or any member thereof, specifically designated by name as insured(s) in a policy as distinguished from  the others who, though unnamed, are protected under some circumstances.

NAMED PERIL POLICIES:   Named Peril Policies specify what perils are insured against, as opposed to so-called all-risk policies.

NON-OWNED AUTOS:   Coverage is provided only for autos not owned, leased, hired, or borrowed by the named insured. Coverage includes autos owned by the insured's employees or members of their households, but only while used in the named insured's business or personal affairs.

OBLIGEE:   Broadly, anyone in whose favor an obligation runs. This term is most frequently used in surety bonds, where it refers to the person, firm or corporation protected by the bond.

OBLIGOR:   Commonly called principal; one bound by an obligation. Under a bond, strictly speaking, both the principal and the surety are obligors.

OCCUPANCY:   In insurance, this term refers to the type and character of the use of property in question.

OCCURRENCE COVERAGE:   A policy providing liability coverage only for injury or loss that occurs during the policy period, regardless of when the claim is actually made.

OTHER STATES INSURANCE:   This provides workers compensation coverages if the insured expands operations into other states not declared at the time the policy is issued or renewed. If the insured elects this coverage and operations begin in a state listed under other states, the insurer provides the same coverage as if the state was declared in the policy at the time of policy issuance.

OPEN COVER:   An agreement whereby the Assured undertakes to declare every item (e.g. shipment, vessel, etc. as appropriate) that comes within the scope of the cover in the order in which the risk attaches. The insurer agrees, at the time of concluding the contract, to accept all valid declarations up to the agreed limit for each declaration. An open cover may be for a fixed period or always open; subject to a cancellation clause.

OWNED AUTO:   Coverage is provided for all autos owned by the named insured. The owned auto symbol is used for liability insurance only.

OVERAGE:   An additional premium charged on a cargo open cover declaration because the carrying vessel is outside the scope of the classification clause.

PACKAGE POLICY:   An insurance policy including two or more lines or types of coverages in the same contract.

PARTIAL LOSS:   A loss under an insurance policy which does not either (1) completely destroy or render worthless the insured property; or (2) exhaust the insurance applying thereto.

PARTICULAR AVERAGE:   Accidental partial loss of the subject matter insured proximately caused by an insured peril. In a freight at risk policy the term may be applied to a claim for loss of freight following particular average loss of goods.

PAY ON BEHALF:   This is an insuring agreement used in some umbrella policies. The agreement promises to make direct payment on behalf of the insured for those sums of money the insured becomes legally obligated to pay because of liability imposed upon the insured by law, or assumed under contract.

PAYMENT BOND:   This bond guaranteeing that a contractor will pay fees owed for labor and materials necessary for construction of a project. If these fees are not paid, an owner who has paid the contractor might be confronted with subcontractor’s or worker’s liens filed against the completed project. If this happens the owner could end up paying many times the value the value of the work done.

PAYROLL AUDIT:   An examination of the insured's payroll records by a representative of the insurance company to determine the premium due on a policy.

PERFORMANCE BOND:   Bond guaranteeing that a contractor will perform under the contract in accordance with all specifications of the bid submitted.

PERIL:   A term used in the Marine Insurance Act (1906) to denote a hazard. The principle of proximate cause is applied to an insured peril to determine whether or not a loss is recoverable. In modern practice the term "risk" often replaces "peril".

PERSONAL ARTICLES FLOATER:   Provides all risk coverage for valuable items such as furs, jewelry, etc. formerly insured under separate contracts.

PERSONAL EFFECTS FLOATER:   An Inland Marine Policy covering worldwide except in the insured's domicile, personal effects usually carried by a tourist.

PERSONAL INJURY:   Injury other than bodily injury arising out of false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander, or violation of a person's right to privacy committed other than in the course of advertising, publishing, broadcasting, publishing, or telecasting.

PERSONAL INJURY COVERAGE:   Liability insurance coverage for third party claims for damages which are other than physical such as libel, slander, false arrest, etc.

PERSONAL INJURY PROTECTION:   The formal name usually given to no-fault benefits in states that have enacted mandatory or optional no-fault Automobile Insurance coverages. PIP usually includes benefits for medical expenses, loss of work income, essential services, accidental death and funeral expenses.

PERSONAL LINES:   This term is used to refer to insurance for individuals and families such as private passenger automobile or homeowner insurance.

PRECERTIFICATION AUTHORIZATION:   A cost containment technique which requires physicians to submit a treatment plan and an estimated bill prior to providing treatment. This allows the insurer to evaluate the appropriateness of the procedures, and lets the insured and the physician know in advance which procedures are covered and at what rates benefits will be paid.

PREMISES/OPERATIONS:   Coverage is provided for damages arising out of ownership or occupancy of the insured premises when not maintained in a reasonable manner. This also covers damages arising out of operations performed by the insured business.

PREMISES BURGLARY:   Covers property other than money and securities inside the premises. It also covers damage to the insured's premises resulting from a covered cause of loss.

PREMISES THEFT and ROBBERY OUTSIDE:   Section (1) covers property other than money and securities inside the premises for loss caused by actual or attempted theft. Section (2) Robbery Outside the premises covers property other than money and securities while it is in the care and custody of a messenger.

PRODUCTS/COMPLETED OPERATIONS:   Products coverage is provided for damages arising out of products manufactured, sold, handled or distributed by the insured. Completed Operations covers damages occurring after operations have been completed or abandoned, or after an item is installed or built and released for it's intended purpose.

PRODUCTS LIABILITY INSURANCE:   Provides protection against claims arising out of the use, handling or consumption of a product.

PROFESSIONAL LIABILITY INSURANCE:   Liability insurance to indemnify professionals, doctors, lawyers, architects, etc. for the loss or expense resulting from claim on account of bodily injuries because of any malpractice, error or mistake committed or alleged to have been committed by the insured in his profession.

PROPERTY DAMAGE (LIABILITY) INSURANCE:   Protection against liability for damage to the property of another not in the care, custody and control of the insured, as distinguished from liability for bodily injury.

PROPERTY INSURANCE:   Insurance which indemnifies a person with an interest in physical property for its loss or the loss of its income-producing ability.

PROXIMATE CAUSE:   The effective cause of loss or damage. It is an unbroken chain of cause and effect between the occurrence of an insured peril or a negligent act and resulting injury or damage.

QUALIFIED PLAN:   A plan under which contributions by the employer are allowed as a deduction from taxable income, and which provides that the deposits for his employees, future benefits are not to be considered as taxable income to them in the year in which they are made.

RATING BUREAU:   An organization that classifies and promulgates and in some cases compiles data and measures hazards of individual risks in terms of rates in a given territory.

RECOVERY:   Amount recovered from a third party responsible for a loss on which a claim has been paid.

REIMBURSEMENT:   Payment of an amount of money related to the amount of loss to or on behalf of the insured upon the occurrence of a defined loss.

REINSTATEMENT:   (1) Putting a lapsed policy back in force; (2) The payment of a claim under some forms of insurance reduces the principal amount of the policy by the amount of the claim. Provision is usually made for a method of reinstating the policy to its original amount.

REINSURANCE:  (1) A contract of indemnity against liability by which the insurance company procures another insurance to insure against loss or liability by reason of the original insurance; (2) Insurance by one insurance company of all or part of a risk accepted by it with another insurance company which agrees to reimburse the insurance company for the portion of the claim insured.

RENTAL REIMBURSEMENT:   The business auto policy provides a coverage extension if an auto is insured for comprehensive or specified cause of loss coverage which insures against loss of use of a covered auto only if the auto is a private passenger type auto and is stolen. Payments begin forty-eight hours after the theft and ends when the insured auto is returned or when the insurer has paid the insured for the auto.However, for broader coverage the insured can pay an additional premium for rental reimbursement coverage. Rental reimbursement pays the cost of renting a substitute auto for replacement of any covered auto that has suffered a covered loss. The daily and maximum limit for this coverage varies among insurers.

REQUIRED UNDERLYING LIMITS:  Required Underlying Limits is a requirement of the insurer. It requires the insured to have certain types and amounts of primary insurance before the umbrella policy can be written.

REPLACEMENT CLAUSE:   A clause limiting Underwriters' liability for damage to machinery cargo.

REPLACEMENT COST:   The cost of replacing property without deduction for depreciation.

REPORTING FORM:   Fire or other direct damage insurance written under a form of policy that covers fluctuating values of stocks of merchandise, furniture and fixtures and improvements by means of periodic reports submitted to the insurance company by the insured, with an annual adjustment of premium on the average value.

RETROACTIVE DATE:   Date on a "claims made" liability policy which triggers the beginning of insurance coverage. A retroactive date is not required. If one is shown on a policy, any claim made during the policy period will not be covered if the loss occurred before the retroactive date.

RISK:   A fortuity. It does not embrace inevitable loss. The term is used to define causes of loss covered by a policy.

ROBBERY and SAFE BURGLARY:   Robbery is the taking of property from a person by the threat of personal injury to that person. Safe Burglary is a specific kind of burglary that means the taking of property from a safe or vault which shows visible signs of forcible entry. This form covers property other than money and securities inside and outside the premises. Property other than money and securities is covered while outside the premises and only in the care and custody of a messenger. Coverage inside the premises is for loss or damage resulting from robbery of a custodian or from safe burglary. A custodian is the named insured or a partner or employee of the insured. .

SALVAGE:  (1) Property taken over by an insurance company to reduce its loss; (2) Award recoverable by salvors under maritime law.

SALVAGE CHARGES:   The award due to a salvor for services rendered in saving the insured property.

SALVAGE LOSS:   Occurs when the Underwriter agrees to settle a cargo claim by paying the difference between the insured value and the proceeds realized by selling the damaged goods.

SCHEDULE:  (1) A list of specified amounts payable for, usually, surgical procedures, dismemberments, ancillary expenses or the like in Health Insurance policies; (2) The list of individual items covered under one policy as the various buildings or animals and other property in property insurance; (3) In Marine policies, a list attached to a slip, open cover, policy or other document, usually detailing the rates of premium for various voyages, interests and risks.

SEAWORTHINESS WARRANTY:   There is an implied warranty in every voyage policy that the ship must be seaworthy at the commencement of the insured voyage or, if the voyage is carried out in stages, at the commencement of each stage of the voyage. To be seaworthy, the ship must be reasonably fit in all respects to encounter the ordinary perils of the contemplated voyage, property crewed, fuelled and provisioned, and with all her equipment in proper working order. Cargo policies waive breach of the warranty, except where the Assured or their servants are privy to the unseaworthiness. Breach of the warranty is not excused in a hull voyage policy, literal compliance therewith being required. Although there is no warranty of seaworthiness in a hull time policy, claims arising from unseaworthiness may be prejudiced if the ship sails in an unseaworthy condition with the knowledge of the Assured.

SECURITY:   The Underwriters subscribing a risk. The Insurers.

SELF INSURED RETENTION:   The self insured retention is the amount of the loss an insured must pay before the umbrella policy would be required to respond. The self insured retention would only apply when a loss is excluded from coverage under the primary policy, but not excluded under the umbrella policy.

STOP LOSS:  (1) Any provision in a policy designed to cut off the insurance company's loss at a given point. Aggregate benefits and maximum benefits are an example; (2) A type of reinsurance designed to transfer the loss from the ceding company to the reinsurer at a given point.

SPECIFIED CAUSE OF LOSS:   This provides coverage against loss from fire, lightning, or explosion; theft; windstorm, hail, or earthquake; flood; mischief or vandalism; and sinking, burning, collision or derailment of a conveyance transporting the covered auto.

SUBROGATION:  The legal process by which an insurance company seeks from a third party who may have caused the loss, recovery of the amount paid to the insured.

SUBROGATION WAIVER:  A waiver by the named insured giving up any right of recovery against another party. Normally an insurance policy requires that subrogation (recovery) rights be preserved.

SUE AND LABOR:   Expenses incurred by the Assured or their representatives with the intention of preventing or minimizing a loss for which the Underwriter would have been liable. They do not include expenses incurred in general average or salvage acts; these being recoverable under the policy only as part of the Underwriters' liability for contribution to general average or salvage, if any. Sue and labor charges are recoverable under a policy that incorporates a sue and labor clause (SG policy), or in accordance with the wording of the policy (e.g. under the "duty of the Assured" clause attached to a MAR policy).

SURETY:   (1) A term loosely used to describe the business or suretyship or bonds. Suretyship is an arrangement whereby one party becomes answerable to a third party for the acts of neglect of a second party; (2) The party in a surety arrangement who holds himself responsible to one person for the acts of another.

SURETY BOND:   A bond in which the surety agrees to answer to the obligee for the non-performance of the principal (known as the obligor).

TAIL:  This term has been used to describe both the exposure that exists after expiration of a policy and the coverage that may be purchased to cover that exposure. On "occurrence" forms a claims tail may extend for years after policy expiration, and the losses may be covered. On "claims made" forms tail coverage may be purchased to extend the period for reporting covered claims beyond the normal policy period.

THEFT, DISAPPEARANCE and DESTRUCTION:  Theft means any act of stealing. Disappearance is unknown causes of loss. Disappearance lacks the elements of knowing if the crime was a theft, burglary or robbery. Destruction is the loss of certain property, it is usually the result of another cause of loss. Section (1) of the form covers money and securities against loss by theft, disappearance, or destruction inside the premises. Section (2) covers money and securities outside the premises in the care and custody of a messenger.

TO PAY AS CARGO:   Used in an ancillary insurances relating to the cargo (e.g. increased value) when the Assured is not required to show evidence of loss or interest and can claim on the policy if he can show that a corresponding loss has been settled on the main cargo policy.

TOTAL LOSS:   This can be actual total loss or constructive total loss.

TOWING AND LABOR:   When this coverage is added, the insurer pays for towing and labor costs each time a covered auto or non-owned auto is disabled, up to a stated amount.

TRANSIT CLAUSE:   A clause in the Institute Cargo Clauses, specifying the attachment and termination of cover.

TRUCKMENS LIABILITY FORM:   See Motor Truck Cargo Policy

UMBRELLA LIABILITY POLICY:   A liability policy designed to provide liability protection above and beyond that provided by standard liability contracts.

UNDER-INSURANCE:   A condition in which not enough insurance is carried to cover the insurable value, and, especially, to satisfy a coinsurance clause.

UNDERWRITER:   (1) A person trained in evaluating risks and determining the rates and coverages that will be used for them; (2) An agent, especially a life insurance agent, who might qualify as a "field underwriter."

UNINSURED/UNDERINSURED MOTORIST COVERAGE:   Uninsured Motorist This insuring agreement pays for bodily injury to an insured who is injured by an uninsured motorist, a hit-and-run driver, or a driver whose insurer becomes insolvent. These benefits are paid under the named insured's policy.Underinsured Motorist This coverage is added to supplement the Uninsured Motorist Coverage, the coverage applies only when the other driver has liability limits at the time of an accident, but the liability limits carried may be insufficient to pay for damages for which the driver is responsible. This is when the insured's underinsured motorists coverage would apply and payment for the difference could be made. The two coverages are mutually exclusive and do not overlap or duplicate each other.

VALUABLE PAPERS AND RECORDS INSURANCE:   An Inland Marine or burglary insurance coverage providing for the replacement of valuable papers, records and forms.

VOID POLICY:   One which is inadmissible as evidence in a court of law (e.g. P.P.I. policy).

VOLUNTARY COMPENSATION ENDORSEMENT:   Workers compensation laws of most states exempt some types of employment from workers compensation benefits. This endorsement amends the standard policy to provide coverage for employees with exempted occupations from the workers compensation act. When the endorsement is added it does not make employees subject to the workers compensation law, but it obligates the insurance company to pay on behalf of the insured, an amount equal to the compensation benefits that would be payable to those employees if they were subject to the workers compensation law of that state.

UNITED STATES LONGSHORE & HARBOR WORKERS ENDORSEMENT (USL&HW):   This is a federal act which is similar to the state workers compensation act. The federal act was designed to provide workers compensation benefits to employees who work in maritime employment upon the navigable waters of the United States and who are usually considered outside the scope of state workers compensation laws. When the USL&HWA endorsement is added to the standard policy it applies to work done in the states scheduled on the policy and extends the definition of the workers compensation law to include the USL&HWCA.

WAITING PERIOD:   A period of time between the beginning of a disability and the date benefits begin.

WAIVER CLAUSE:   A clause which entitles both Underwriter and Assured to take measures to prevent or reduce loss without prejudice to the rights of either party.

WARRANTY:   A statement made on an application for insurance that is warranted to be true in all respects. If untrue in any respect, even though the untruth may not have been known to the person giving the warranty, the contract may be voided whether or not the untruth or inexactness is material to the risk.

WATERBORNE AGREEMENT:   A market understanding whereby Underwriters cover goods against war risks only whilst they are on the overseas vessel. This rule is relaxed only in the case of goods in a transshipping port for a short period awaiting onward carriage.

WITHOUT BENEFIT OF SALVAGE:   A term in a marine insurance policy, whereby the Underwriters forgo their subrogation rights. A policy incorporating such a term is deemed to be a gambling policy in law, and is therefore invalid in a court of law.

WITHOUT PREJUDICE:   The claim is paid on this occasion, although the Underwriter feels it does not attach to the policy, but this action must not be treated as a precedent for future similar claims.

WORKERS COMPENSATION:   (1) A schedule of benefits payable to an employee for injury, disability, dismemberment, or death as a result of occupational hazard. The payments are a liability of an employer. (2) Insurance agreeing to pay the Workers Compensation benefits required by law on behalf of the employer.