Definition Starts with: A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z Alien Insurer – insurance company formed according to the legal requirements of a foreign country. In order for an alien insurer to be able to carry on general operations and sell its products in a particular state in the United States, it must conform to that state’s rules and regulations governing insurance companies. Top of Page Top of Page Claims Made Basis Liability – method of determining whether or not coverage is available for a specific claim. If a claim is made during the time period when a liability policy is in effect, an insurance company is responsible for its payment, up to the limits of the policy, regardless of when the event causing the claim occurred. Experts often advise that it is extremely important, when purchasing a property or casualty policy, to determine if claims are paid on claims made basis or a claims occurrence basis. Claims Made – see Claims Made Basis Liability Coverage Claims Made Form – see Claims Made Basis Liability Coverage Claims Occurrence Basis Liability – method of determining whether or not coverage is available for a specific claim. If a claim arises out of an event during the period when a policy is in force, the insurance company is responsible for its payment, up to the limits of the policy, regardless of when the business submits the claim. Experts often suggest that it is extremely important, when purchasing a property or casualty insurance policy, to determine if claims are paid on claims made basis or a claims occurrence basis. Commercial General Liability Form (CGL) – liability coverage section of a SIMPLIFIED COMMERCIAL LINES PORTFOLIO POLICY (SCLP). Provides for separate limits of coverage for general liability, fire legal liability, products and completed operations liability, advertising and personal liability, and medical payments. An AGGREGATE LIMIT of liability is in force for the general liability, fire legal liability, advertising and personal liability, and medical payment claims. When total claims for all of these areas exceed a given annual aggregate limit of liability, the policy limits are said to be exhausted and no more claims for that year will be paid under the policy. There is also an aggregate limit of liability in force for products and completed operations liability claims. This form replaced the COMPREHENSIVE GENERAL LIABILITY INSURANCE form. Completed Operations Insurance – coverage for a contractor’s liability for injuries or property damage suffered by third parties as a result of the contractor completing an operation. The contractor must take reasonable care in rendering a project safe and free from all reasonable hazards. See also COMMERCIAL GENERAL LIABILITY FORM (CGL). Top of Page Damages - sum the insurance company is legally obligated to pay an insured for losses incurred. Directors & Officers Liability Insurance (D&O) – coverage when a director or officer of a company commits a negligent act or omission, or misstatement or misleading statement and a successful libel suit is brought against the company as a result. Usually a large deductible is required. The policy provides coverage for directors’ and officers’ liability exposure if they are sued as individuals. Entity and Employment Practices Liability coverage can also be purchased. Coverage is also provided for the costs of defense such as legal fees and other court costs. Domestic Insurer – insurance company incorporated according to the laws of the state in which a risk is located and the policy issued. The insurance company is domiciled in that state. Top of Page Errors & Omissions (E&O) – policies generally available to the various professions that require protection for negligent acts and or/omissions resulting in bodily injury, personal injury, and/or property damage liability to a client (DAMAGES). Employment Practices Liability Insurance (EPLI) – policy that provides protection in the event of legal actions resulting from charges of harassment, discrimination, wrongful termination of employment, defamation, and invasion of privacy. Environmental Impairment Liability – negligent acts and/or omissions by the individual(s) and the organization(s) resulting in damage to the environment. For example, pollution of the environment suits against manufacturers are quite common today. The pollution risk is an excluded insurable risk under most liability policies; however, insurance coverage in some instances is becoming available under ENVIRONMENTAL IMPAIRMENT LIABILITY(EIL) INSURANCE policies. Environmental Impairment Liability (EIL) Insurance – coverage in the event that negligent acts and/or omissions by individual(s) and organization(s) result in damage to the environment and a liability suit against these parties. Top of Page Foreign Insurer – insurance company whose domicile is in a state other than the one in which the company is writing business. See also NON ADMITTED INSURER Top of Page Top of Page Top of Page Inland Marine Insurance (Transportation Insurance) – BUSINESS RISKS coverage for (1) property damage or destruction of an insured’s property and (2) liability exposure of an insured for damage or destruction of someone else’s property under his or her care, custody, or control. The insured (shipper) needs this insurance because the carrier (who can also be the insured and purchase inland marine insurance) may be found not at fault for damage to a property; or the carrier may not have any insurance or adequate insurance. Perils covered include fire, lightning, windstorm, flood, earthquake, landslide, theft, collision, derailment, overturn of the transporting vehicle and collapse of bridges. Insurable Interest – expectation of a monetary loss that can be covered by insurance. Insurable interest varies according to the type of policy. These relationships give rise to insurable interest: (1) owner of the property; (2) vendor (to the extent of the unpaid balance due on the property sold to the vendee); (3) vendee; (4) bailee (to the extent of the value of the property under his or her temporary care, custody, and control); (5) bailor; (6) life estates; (7) fees simple estates; (8) mortgagee (to the extent of the unpaid balance due on the loan to which the property is pledged as security); and (9) mortgagor. Top of Page Top of Page Top of Page Liability Insurance – coverage for all sums that the insured becomes legally obligated to pay because of bodily injury or property damage, and sometimes other wrongs to which an insurance policy applies. Personal liability policies include COMPREHENSIVE PERSONAL LIABILITY (CPL), HOMEOWNERS INSURANCE POLICY, PERSONAL AUTOMOBILE POLICY (PAP), Personal Umbrella Liability, and the Uninsured Motorist Endorsement. Business liability policies include BUSINESS AUTOMOBILE POLICY (BAP), BUSINESSOWNERS POLICY, Completed Operations and Products Liability, COMMERCIAL GENERAL LIABILITY INSURANCE (CGPL), Employers Liability and Workers compensation, MANUFACTURERS AND CONTRACTORS LIABILITY (M&C), OWNERS, LANDLORDS AND TENANTS LIABILITY INSURANCE (OL&T), Physicians, Surgeons and Dentist Professional Liability, STOREKEEPERS LIABILITY INSURANCE, Umbrella Liability Policy, and the Uninsured Motorists Coverage. Lloyd’s of London – insurance facility composed of many different syndicates, each specializing in a particular risk; for example, hull risks. Lloyds provides coverage for primary jumbo risks as well as offering REINSURANCE AND RETROCESSIONS. Membership in a syndicate is limited to individuals (Companies have recently been approved as well now) with large net worth, and each member may belong to one or more syndicates depending upon his or her net worth. Although much of the publicity Lloyd’s receives involves insuring exotic risks such as an actress’ legs, this represents only a very small portion of its total business, most of which involves reinsurance and retrocessions. Top of Page Top of Page Non Admitted Insurance – policy purchased by an insured from an insurer in another state. This insurer is not licensed in the state where the insured’s risk is located. Not licensed DOES NOT mean the company is not regulated by the state! Non Admitted Insurer – company not licensed by a particular state to sell and service insurance policies within that state. Not licensed DOES NOT mean the company is not regulated by the state! Top of Page Ocean Marine – coverage in the event of a marine loss. Marine loss is damage or destruction of a ship’s hull and the ship’s cargo (freight) as the result of the occurrence of an insured peril. Perils insured against include collision of the ship with another ship or object; the ship sinking, capsizing, or being stranded; fire; piracy; jettisoning (throwing overboard of property to save other property); barratry (fraud or other illegal act by a ship’s master or crew, resulting in damage or destruction of the ship and/or cargo), and various other liability exposures. To be covered, an act cannot involve prior knowledge by the owner of the ship or its cargo. Excluded are wear and tear, dampness, decay, mold, and war. Top of Page Product Liability Insurance – coverage usually provided under the COMMERCIAL GENERAL LIABILITY INSURANCE (CGL); it can also be purchased separately. See also PRODUCTS AND COMPLETED OPERATIONS INSURANCE. Product Recall Exclusion – exception in general liability policies for all expenses associated with product recall. In recent years, there have been increasing instances of federal recalls. In addition, there have been many instances of deliberate tampering and of manufacturers issuing their own recalls. In either event, the cost of identifying the products, communicating with consumers, inspecting the returned products, and repairing or replacing them can be enormous. These costs are excluded from general liability policies, but PRODUCT RECALL INSURANCE can be purchased for this purpose. Product Recall Insurance – coverage for the expenses incurred by a business resulting from the recall of products, whether defective or not. See also PRODUCT LIABILITY INSURANCE; PRODUCT AND COMPLETED OPERATIONS INSURANCE; PRODUCT RECALL EXCLUSION. Products and Completed Operations Insurance – coverage for an insured manufacturer for claims after a manufactured product has been sold and/or a claim results from an operation, which the manufacturer has completed. See also COMPLETED OPERATIONS INSURANCE. Professional Liability Insurance - coverage for specialists in various professional fields. Since basic liability policies do not protect against situations arising out of business or professional pursuits, individuals who hold themselves out to the general public as having greater than average expertise in particular areas purchase professional liability insurance. See also Errors and Omissions (E&O) Property – real (land and attachments) and personal (movable effects not attached to land). Both classifications of property give rise to an insurable interest. See also INSURABLE INTEREST; PROPERTY AND CASUALTY INSURANCE PROVISIONS Top of Page Top of Page Top of Page Top of Page Top of Page Top of Page Top of Page Top of Page Top of Page Top of Page Top of Page