Main Menu
Sections

Glossary H-M

H

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.

HEALTH INSURANCE
Protection against the costs of hospital and medical care or lost income arising from an illness or injury (sometimes called Accident & Sickness Insurance).

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 AUTOMOBILE
Autos the insured leases, hires, rents or borrows but not autos owned by employees or members of their households.

HIT AND RUN
Collision between a motor vehicle with another motor vehicle, object or pedestrian, where the driver of the vehicle leaves the scene of the accident without identifying himself.

HMO (Health Maintenance Organization)
An organization that provides health care for a monthly payment set in advance. In a traditional HMO, doctors and other providers are salaried employees and the facilities are owned by the organization. In recent years, however, other forms of HMOs have sprung up that contract with doctors and hospitals to care for members at set, negotiated fees. Many HMOs are hybrids, offering both kinds of care to members.

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.

I

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 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 ADJUSTER
An adjuster who works as an independent contractor, hiring himself out to insurance companies or other organizations for the investigation and settlement of claims.

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

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 INTEREST
A direct monetary interest in the insured property sufficient to result in monetary loss should the property be damaged or destroyed.

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.

INSURANCE
A system to protect persons, groups, or businesses against the risks of financial loss by transferring the risks to a large group who agree to share the financial losses in exchange for premium payments.

INSURED
The person whose risk is transferred and shared; the party to an insurance agreement whom the insurer agrees to indemnify for losses, provide benefits for, or render services to.

INSURER
The company or group offering protection through the sale of an insurance policy to an insured; the party to an insurance agreement who undertakes to indemnify for losses, provide pecuniary benefits, or render services.

J

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

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.

L

LEASE
Contract whereby the owner or user of property (the lessor) agrees to let another party, (the lessee) 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.

LESSEE (Leasee)
The party to whom a lease is granted. LESSOR: The party who grants a lease to the lessee.

LIABILITY
Broadly, any legally enforceable obligation; a responsibility of one person to another, enforceable in law.

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.

LIEN
A word that indicates an encumbrance on property, either for discharge of a duty or the payment of a debt. When a lien exists, the conditions attaching to the issue of an insurance contract require that it be disclosed to the insurance company.

LIFE INSURANCE
Protection against the death of the Insured in the form of payment to a designated beneficiary, typically a family member or business.

LONG-TERM CARE INSURANCE
A type of insurance policy that covers the cost of long-­‐term custodial care in a nursing facility or at home.

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

LOSS OF USE INSURANCE
Insurance against loss due to the inability to use property because of its damage  or  destruction.

LOSS PAYABLE CLAUSE
Clause in an insurance policy to specifically identify interested parties (the insured,  mortgagees,  trustees,  lienholders,  etc.).

M

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.

MALPRACTICE INSURANCE
A professional liability coverage that insures physicians, lawyers and other specialists against suits alleging their negligence.

MANAGED CARE
A health plan that places limits on which treatments and which doctors, hospitals and other providers a member can use and still receive full coverage. Generally, under managed care an insurer negotiates lower fees with doctors, hospitals, or laboratories who join in a network that members of the plan are encouraged to use. Frequently, members of a managed care plan can use health care providers outside their network, but they must pay a greater share of the fees.

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.

MARINE INSURANCE
Insurance coverage for goods in transit, and for the vehicles that transport them, over waterways, over land, and in air.

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.

MATERIAL FACT
Anything affecting an insurance contract significant enough to change the agreement between the insurance company and the policyholder.

MEDICAID
A federal/state program that helps pay for health care for the needy, blind or disabled and for low-­‐income families with children.

MEDICARE
A federal health care program for people age 65 and over, and for the disabled.

MEDIGAP
Insurance coverage sold by private insurers to supplement federal insurance benefits and expenses not covered under the federal Medicare program.

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

MISREPRESENTATION
An incorrect statement made about a material fact that, if made deliberately and with intent to deceive, could cause the insurance contract to become null and void.

MITIGATE
To make less severe; steps to eliminate further damage after a loss occurs.

MORTGAGE INSURANCE
Life insurance that pays the balance of a mortgage if the mortgagor (insured) dies.

MORTGAGEE
The person who has loaned his money to another and taken the security of the property in exchange.

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.

MYSTERIOUS DISAPPEARANCE
The disappearance of insured property in a mysterious, unexplained manner.