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.
Failure to use the degree of care expected from a reasonable and prudent person.
A system in which each driver’s auto insurance coverage pays for injuries and damage, no matter who caused the accident.
A policy which the insured has the right to continue in force by the timely payment of premiums set forth in the policy, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force. (See also “Guaranteed Renewable Policy”.)
NOTICE OF LOSS
Written notice of a loss to the insurance company as outlined in the conditions of the insurance policy.
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.
Commonly called principal; one bound by an obligation. Under a bond, strictly speaking, both the principal and the surety are obligors.
In insurance, this term refers to the type and character of the use of property in question.
A policy providing liability coverage only for injury or loss that occurs during the policy period, regardless of when the claim is actually made.
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.
An additional premium charged on a cargo open cover declaration because the carrying vessel is outside the scope of the classification clause.
An insurance policy including two or more lines or types of coverages in the same contract.
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.
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.
An examination of the insured’s payroll records by a representative of the insurance company to determine the premium due on a policy.
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.
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.
This term is used to refer to insurance for individuals and families such as private passenger automobile or homeowner insurance.
The written statement of a contract effecting insurance, or certificates thereof, by whatever name called and including all causes, riders, endorsements and papers attached thereto and made part thereof.
The period during which the policy contract affords protection.
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.
A physical condition of an insured person which existed prior to the issuance of the policy.
The particular location of a property or a portion thereof as designated in a policy.
The payment for an insurance policy, usually paid periodically (annually, semi-‐annually, quarterly, or monthly).
Pre-existing damage that occurred prior to the loss in question.
Cancellation of an insurance contract by the insurance company, allowing a policyholder a share of the premium relating to the remainder of the time under the contract that bears to the total contract premium.
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.
PROOF OF LOSS
A statement made to the insurance company under oath setting out the basis of an insured’s claim under the insurance policy.
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.
Insurance which indemnifies a person with an interest in physical property for its loss or the loss of its income-‐producing ability.
Outside of the time period in which a legal action can be commenced.
The immediate and 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.
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.
Amount recovered from a third party responsible for a loss on which a claim has been paid. REBATE: A reduction of a premium.
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.
(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.
(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.
A clause limiting Underwriters’ liability for damage to machinery cargo.
The cash value representing what it would cost to replace the specific property without deduction for depreciation.
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.
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.
An endorsement to an insurance policy that modifies clauses and provisions of the policy, adding or excluding coverage(s).
A fortuity. A term used to designate an insured of a peril insured against. It does not embrace inevitable loss. The term is used to define causes of loss covered by a policy.
(1) Property taken over by an insurance company to reduce its loss; (2) Award recoverable by salvors under maritime law.
The award due to a salvor for services rendered in saving the insured property.
Occurs when the Underwriter agrees to settle a cargo claim by paying the difference between the insured value and the proceeds realised by selling the damaged goods.
(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.
SCHEDULE OF LOSS
Notice completed by the insured documenting loss or damage to contents, personal property and/or stock.
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.
The Underwriters subscribing a risk. The Insurers.
Cancellation of an insurance contract at the request of the policyholder with a refund of premiums to the policyholder less than would be given under pro-‐rata consideration.
Sufficient assets and income. It is the primary responsibility of a state’s insurance department is to monitor insurance companies licensed to transact business within their state and make certain that they remain solvent and have the ability to pay the claims of their policyholders.
SPECIFIED DISEASE INSURANCE
A policy which provides stated benefits, usually of large amounts, toward the expense of treatment of the disease or diseases named in the policy.
(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.
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.
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).
(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.
A bond in which the surety agrees to answer to the obligee for the non-‐performance of the principal (known as the obligor).