JIC - Glossary <b>-</b>

Insurance Products

	Marine Insurance
	Engineering Insurance
	Property Insurance
	Motor Insurance
	Life Insurance
	Medical Insurance
	Casualty Insurance

Accident
1) An unusual, fortuitous, unexpected or unforeseen event or occurrence.
2) A mishap that is not expected or designed.

Act of God
A direct, violent sudden act of nature that could not have been foreseen, and its effect could not have been prevented, e.g., flood, earthquake.

Actual Cash Value
The fair market value of property taking into account factors that might augment or reduce the value of the property in question.

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.

Agent
An Insurance Professional/Intermediary Who Markets And Explains Insurance Products To The Insureds And Prospective Insureds. Agents, Like Brokers, Are Restricted In The Marketing And Placement Of Coverage To Those Carriers With Whom They Have A Contractual Relationship.

Aggregate Limit
Maximum Amount That The Insurer Will Pay Under A Liability Policy During One Annual Policy Period, Regardless Of the Number Of Occurrences, Usually In Addition To Legal Defense Costs. For General Liability, Policies Are Sometimes Written With The Aggregate Limit Applying Separately To Each Scheduled Location
Blanket Policy
Insurance on two or more items, or locations, in one aggregate sum insured without separate amounts for each item.

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 / exit.

Business Interruption Insurance
Various types of insurance against business expenses and loss of income resulting from a fire or other insured peril.
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 control.

Cargo
Goods being transported, such as the load of a truck or the goods being carried by a ship. The cargo of a ship does not include the equipment needed to operate the ship.

Cede
An insurer cedes part of a risk to a reinsurer when it transfers or reinsures part of the risk.

Claim
A claim is the exercising of the right of an insured to be indemnified by his insurance company for damage suffered.

Claims Adjuster
An employee of an insurer who handles and is responsible for incoming claims.

Claims Made Basis
Provision in some insurance and reinsurance contracts covering only claims made during term of the contract.

Consequential Loss
It is an indirect result of the occurrence that causes the loss. In other words, a loss resulting as a consequence of some occurrence.

Contract
An agreement made between two or more persons, which is intended to be enforceable at law, and is constituted by the acceptance by one party of an offer made to him by the other party, to do or to abstain from doing some act. The offer and acceptance may either be expressed or inferred by indication in the conduct of the parties.

Commercial General Liability Insurance
Covers Liability Exposures That Are Common To All Organizations; A Combination Of Three Separate Coverages, Each With Its Own Insuring Agreement And Exclusions: Coverage A = General Liability; Coverage B = Personal Injury And Advertising Injury Liability; And Coverage C = Medical Payments.

Commercial Property Insurance
Covers Risk Of Loss To An Organization’s Buildings Or Personal Property. Usually Includes Buildings, Personal Property Of The Insured, Personal Property Of Others On Site And In Insured’s Possession. Coverage Can Be On An All Risk Or Specific Perils Basis
Deductible
An agreed specified sum to be deducted from the amount of loss and assumed by the insured.

Depreciation
Reduction in value of property through use, aging, deterioration and obsolescence.

Directors and Officers Liability Insurance
Protection for officers and directors of a corporation against damages resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors.

Disability
Inability to carry on in one's normal occupation due to accident or sickness.

Disclosure
Act of making known something known.
Earned Premium
That portion of premium earned or charged for the period of time a policy remained effective.

Earthquake Coverage:
Purchased As A Separate Policy/ Endorsement As Most Property Policies Do Not Protect Against Damage By Earthquake.

Electronic Property Coverage:
An Inland Marine Floater Designed Specifically For Computers And Other Electronic Equipment. Provides Coverage For Perils Not Normally Included In A Standard Property Policy, Such As Electrical Surge And Loss Of Data

Equipment Breakdown Insurance:
Supplements Property Insurance (Which Specifically Excludes Physical Damage And The Financial Damage Stemming From Equipment Breakdown) To Cover The Unique Causes That Can Damage Equipment.

Excess Of Loss Reinsurance
A Type Of Reinsurance In Which The Primary Insurer Is Indemnified For Losses That Exceed A Specific JD Amount
Employers 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.

Exclusion
Risks, perils or properties defined in the policy as not covered.

Explosion
A rupture of a pressure vessel of some kind due to excessive internal pressure (usually accompanied by a loud noise).

Exposure
The hazard threatening a risk because of external or internal physical conditions.
Fraudulent
Dishonest; based on or obtained by fraud.

Free on Board (F.O.B.)
When goods are shipped F.O.B., the shipper is responsible only until the goods have been placed on board the vessel or freight car or truck or other means of transport. After that the risk belongs to the consignee.
Good Faith
Most ordinary contracts are good faith contracts. Insurance contracts are agreements made in the utmost good faith. This implies a standard of honesty greater than that usually required in most ordinary commercial contracts.

Gross Negligence
The degree of negligence somewhat greater than ordinary negligence. It may be a reckless wanton and willful misconduct causing bodily injury and/or property damage.
Hazard
A Condition which increases the chances of a loss.

Health insurance
Covers Medical Expenses For Accidents Or Sickness, On A First-Party Basis, And Regardless Of Fault
Incurred Losses
The Sum Of Paid Losses, Loss Reserves, And Loss Adjustment Expense Reserves

Intentional Acts
Deliberately Fraudulent Acts Or Omissions, Willful, Reckless Or Intentional Disregard Of Any Law Or Laws

Inception
The date and time on which coverage under an insurance policy takes effect.

Indemnity
A contract, expressed or implied, to repay in the event of a loss. Insured neither gains nor loses.

Independent Adjuster
One who adjusts losses on behalf of insurance companies, but is not employed by any one insurance company.

Insurance
A contract in which one party, the insurer, for monetary consideration agrees to reimburse another, the insured, for loss or liability for a loss on a defined subject caused by specified hazards or perils.
Lapse
An insurance policy which, having reached its expiry date, is not renewed or extended is said to have lapsed.

Legal Liability
Liability imposed by law on individuals or corporations to pay for harm done to others.

Liability Insurance
Insurance Covering The Financial Risk Of civil Lawsuits

Loss Adjustment Expenses
Expenses Incurred By An Insurer To Settle Claims

Loss Adjustment Expense Reserves
Estimates Of The Future Cost Of Defending And Settling Claims For Losses That Have Already Occurred

Loss Ratio
The Ratio Of Incurred Losses And Loss Adjustment Expenses To Earned Premiums
Malpractice
A performance by a professional which is deficient in skill from what might ordinarily be expected of a professional person.

Market Value
The value of an asset based on a current market valuation, e.g., the amount for which the item could be sold on the open market.

Material Fact
Something affecting a contract of insurance important enough to change the agreement between the company and the policyholder. Material facts must be disclosed if asked about. Failure to do so may result in a voiding of the policy involved. An exception to this general rule is that, with respect to ocean marine insurance, all material facts must be disclosed whether the insurer asks the appropriate question or not.

Misrepresentation
An incorrect statement made about a material fact. Misrepresentation can be innocent, e.g., arising from an oversight; fraudulent (in other words, a deliberate untruth with intent to deceive) or the result of extreme carelessness where a statement is made without regard to whether it is true or false. When a misrepresentation is discovered, the insurer may either continue the contract or treat the contract as void with a full return of any premiums paid.

Moral Hazard
Danger of loss arising from the nature of the insured rather than from the physical nature of the risk. This would encompass those instances where the chance of loss is increased by an insured's carelessness, incompetence, recklessness, indifference to loss or an insured's fraudulent nature.
Named Peril Policy
A policy in which the perils insured against are listed, as opposed to one which insures against "all risks."

Named Insured :
An Individual, Business Or Organization That Is Identified On The Policy Declarations Page As The Insured(s) Under A Policy. Most Policies, Especially Liability Policies, Will Have Insureds Or Additional Insureds Other Than The Named Insured (Such As Landlords), But Only The Named Insured Is Responsible For Premium Payments, Receipt Of Notices, And Adjustment Of Losses.
Negligence
Failure to use the degree of care expected from a reasonable and prudent person.

Non-insurable Risk
A risk for which no insurance can be written. The chance of loss is very high or cannot be accurately measured.
Occupational Accident
Accident To An Employee That Occurs Within And Arises Out Of The Course Of Employment.

Occurrence Basis
A Liability Coverage Form That Covers Claims That Occur During The Policy Period, And For Which Claims Can Be Reported To The Insurance Company At Any Time During Or After The Policy Period.
Peril
The event that caused a loss covered by the policy, e.g., fire.

Personal Property
Legally, any property of an insured other than real property.

Policy Conditions
Any Provision In An Insurance Policy That Qualifies An Otherwise Enforceable Promise Of The Insurer

Premium
The price of insurance protection for a specified risk for a specified period of time.

Proximate Cause
Cause of loss or damage. Unbroken chain of cause and effect between the occurrence of an insured peril and damage to property.

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.
Reinsurance
The Transfer Of insurance Risk From One Insurer To Another Through A Contractual Agreement Under Which One Insurer (The Reinsurer) Agrees, In Return For A Reinsurance Premium, To Indemnify Another Insurer (The Primary Insurer) For Some Or All Of The Financial Consequences Of Certain Loss Exposures Covered By The Primary Insurer’s Policies

Replacement Cost Clause
Applies generally to some fire insurance policies where a special cover may be purchased so that in the event of fire, repairs or replacement will be made with material of like kind without cost to the insured for depreciation or betterment.

Risk
The chance of loss. Specifically the possible loss or destruction of property or the possible incurring of a liability.

Robbery
The taking of another's property by force or threat of force.
Stock
Merchandise for sale or manufacture, as distinguished from furnishings, fixtures or equipment.

Subrogation
Once a company has paid a loss for which someone other than the policyholder is responsible, it may have the right to recover this loss from the guilty party.

Sum Insured
The amount for which insurance is effected and the one on which the premium is based. Often in life insurance, the term is "sum assured."
Total Loss
Loss of all the insured property. Also a loss involving the maximum amount for which a policy is liable.

Theft
The wrongful taking of the property of another. It is a broad term and includes larceny, pilfering, hold-up, robbery and pick-pocketing.
Underwriter
1) The insurance company or group that underwrites or insures a particular risk.
2) The individual within an insurance company whose responsibility it is to accept or reject business in the particular line in which he/she specializes and in this way chooses risks his/her principals are prepared to underwrite.
Warranty
Statement or stipulation in a contract, the breach of which nullifies the contract.

Insurance Products

Glossary -