General Liability
A form of insurance sold to businesses to indemnify the business for third party liability claims due to negligence. Coverages can include premises and operations liability for onsite and jobsite accidents and products liability claims for products that injure third parties.

Workers Compensation Insurance
Protection which provides benefits to employees for any injury or contracted disease arising out of and in the course of employment. All states have laws which require such protection for workers and prescribe the length and amount of such benefits provided.

Commercial Umbrella
A form of liability insurance protecting policyholders for claims in excess of the limits of their primary automobile, general liability and workers compensation policies, and for some (few) claims excluded by their primary policies which are subject to a deductible, which may range from $250 for a personal umbrella to a minimum of $10,000 for a commercial umbrella.

Business Auto Policy
Coverage designed to provide a "standard" form for insuring commercial vehicles (other than private passenger cars).

Variable Life Insurance
Variable life insurance is permanent life insurance with many characteristics of traditional whole life insurance. Policyholders of variable life insurance select how the cash values will be invested. The cash value will, naturally, fluctuate in relation to the investment performance of the equities selected. Consequently, the cash value is not guaranteed, as it is in traditional whole life insurance. The cash value of the variable life policy becomes a part of the death benefit. A minimum death benefit equal to the face amount of the policy is guaranteed. Because there is a risk involved with variable life insurance, the federal government has labeled it a "security". State insurance departments and the Securities and Exchanges Commission regulates it. For more information on variable life contact us.

Universal Life Insurance
Universal life insurance is a variation on whole life insurance. It has considerable flexibility, but consider it a type of term insurance with a policy value fund attached. This type of policy allows the insured to determine the amount and the frequency of premium payments. It also allows policyholders to adjust the policy face amount, up or down, as needed. As a result, one policy serves through all kinds of changes in circumstances. Universal life has an insurance element, a savings element and expense element. Each month, a mortality charge is deducted from the policy’s cash value account for the cost of the insurance protection. This charge may also include an expense or loading charge. As premiums are paid, the cash value accumulates, interest is then credited to the policy’s cash value. As long as the cash value account is sufficient to pay the monthly mortality and expense costs, the policy will continue in effect. One other distinguishing factor of a universal life policy s the fact that partial withdrawals can be made from the policy’s cash value account. And the policy owner may surrender the policy for its cash value at any time.

Term Life Insurance
Term insurance provides protection for a limited number of years. It will expire without value if the insured survives the stated period. That stated period can be one or more years, but usually policies are written for five to twenty years. Term insurance is the simplest type of life insurance plan. Term life insurance is also called "temporary" life insurance because it provides protection for a short amount of time. Most families buy term insurance to cover the years when children are young. Term policies can be written to provide coverage from their issue date until the end of the year specified or they can be written to cover the insured until he or she reaches a certain age. There are two basic forms of term insurance. Level term offers a level amount of protection for a specified period and then the policy expires. Decreasing term insurance offers benefit amounts that decrease gradually over the term of protection. Most term policies should also offer the option to renew at the end of the period and an option to convert to a whole life policy.

Whole Life Insurance
Whole life insurance is a permanent level of insurance protection. It is in effect from the policy issue to the death of the insured. This type of life insurance carries level premiums, level benefits and cash values. Whole life insurance combines insurance protection with a savings element. The policy’s cash value builds, increasing each year the policy is in force. This is often referred to as the "cash surrender value". The amount of the policy’s cash value depends upon 3 factors: The face amount of the policy. The duration and amount of the premium payments. How long the policy has been in effect. Whole life insurance was designed to mature at age one hundred. The number 100 is an actuarial assumption, because every insured is presumed to be dead by then. For those who are lucky enough to live to age 100, the company will issue checks for the full value of the policy. Another benefit of whole life insurance is the fact that the policy owner has access to a ready source of funds that he can borrow at reasonable rates.

Garagekeepers Legal Liability (GKLL)
Pays amounts an insured is legally obligated to pay because of damage or loss to property of others that is in the insured’s care, custody or control.

Homeowners Insurance
There are six basic types of home insurance policies. Regardless of what state you live in, except Texas, the policies are very similar. Each is defined by the perils it covers. The HO1 Policy covers the basic home and it's contents. The dwelling itself is covered and all personal property is guarded against losses from eleven types of perils. If your home burns down or is struck by lightning, you are insured against the loss. Other disasters covered include windstorm, hail, volcanic eruption or an explosion. If your home or property is vandalized or if you are robbed, the insurance company will reimburse you for your loss. Your home is also protected against damage from riots or civil commotion. And if any vehicles or aircraft do damage to your property, you will be paid an amount equal to the cost of rebuilding. If you have a mortgage on your home, you are required to have home insurance. These policies are usually very basic and you may want to consider adding special provisions for valuable personal items, such as jewelry or computers. Many homeowners add coverage against natural disasters not covered in the basic policy, such as earthquake or flood.

Renters Insurance
Apartment renters need special insurance to protect their belongings. This type of insurance covers your personal property at home and away form home. The policy insures your personal effects against 17 perils including: smoke, fire, lightening, burglary, vandalism, riot or civil commotion, explosion or electrical surge damage, windstorm or hail, falling objects and other similar hazards. You’ll also receive financial protection against claims or suits brought by others for accidental bodily injury or property damage suffered while in your apartment. The policy covers all members of your family and your pets. If an accident with Fido leads to a lawsuit, you’ll be covered by your Renters insurance. Keep in mind, some insurance companies are skittish about writing policies for owners of certain ferocious breeds such as Rottweilers, pit bulls and Doberman Pinschers. You might be able to save some money on your premiums if you haven’t had any claims in the past three years, if you home has smoke detectors or fire extinguishers, if the home is less the 10 years old, if you’ve installed a burglar alarm or deadbolts, or even if you’re a senior citizen. This policy provides exactly the same coverage, as homeowner with the exception there is no coverage for a building. Be sure to ask about any other discounts when you’re getting a quote.

Individual Health Insurance
Individual health insurance coverage is generally more expensive than group health insurance. Like any company, which purchases in bulk to save money, a group that purchases health insurance together will also save money. The most common type of group insurance is that which is offered by your employer. Typically the employer will pay some part of the cost of that insurance. But, that employer provided insurance might not meet all the needs of the employee. This is where individual health insurance is most commonly needed. By purchasing supplemental health insurance, employee is better able to weather the extreme costs of health care. If you are self-employed, you should see if your profession has an association, which offers a group insurance policy. Failing that, you can reduce your health insurance costs by raising the deductible. For more information about individual health coverage, contact an insurance expert. This information is general in nature and should not substitute for the advice of and expert in the field.

Major Medical Insurance
Major medical insurance covers extended major injuries and illnesses, the type of devastating health problems that can ruin you financially. If you don’t have insurance, this type of policy is probably your highest priority. Major usually covers problems that aren’t included in basic health. For this reason, both major medical and basic health are generally sold in a package deal called comprehensive health insurance. Major medical benefits typically include hospitalization, doctor fees, diagnostic work, surgery, home care, rehabilitation, blood and drugs. It is designed to cover prolonged treatment so no time limits are implemented. However, you are usually responsible for co-payments, deductibles and twenty percent of the charges.

Disability Insurance
When you select disability coverage, make sure you understand how the policy defines disability. This is important because the cost and type of coverage will be affected. Some policy plans pay only you are unable to work, whether at your current job or any other position. Other policies might pay if you cannot work at your regular profession. Another coverage might offer payment based on the amount of time you could devote to you job. If, for instance, you suffer a heart attack and can only work part time, you could collect from some policies, but from others you couldn’t. Talk with us to find out which type of disability coverage best suits your needs. There are number of different types of disability insurance policies. Most of the variation is due to the amount of coverage provided. One type of disability insurance is described as "own occupation". Quite simply this means that if you are unable to perform within your own occupation then you get complete disability. Even if you take up another position that makes as much or more money, you still receive full benefits. This type of disability policy is very expensive. The income replacement policy only replaces the income that is lost. For instance, a surgeon who can no longer operate yet can teach, will have the difference between his teaching salary and surgical income replaced. And there are step rated policies. This type of policy increases in cost as you age and the chances of disability increase. Disability insurance is a safety net that protects you and your income should you become disabled. This sort of policy generally covers people while they are in their working years. Determining how much insurance you need is relatively straightforward. Generally speaking, you’ll need to cover all of your living expenses minus those expenses that were incurred as a result of your working. In other words, a certain percentage of your income, generally between 40 and 20 percent, is directly or indirectly related to the process of getting to and from work and doing your job. Since you are disabled and unable to work, you do not need to replace that income devoted to the job. If you’re uncertain as to the exact amount you need, consult an expert. This information is general in nature and should not substitute for the advice of an expert in the field.

Flood Insurance
All homeowners policies exclude damage caused by flood. You can purchase coverage on a separate policy backed by the federal government. This coverage may be purchased on your home and contents. The price is very affordable and is based on the flood plain you live in. You must buy this coverage before the water starts rising because there is a 30-day waiting period before coverage starts. Because this is a federal program the price is exactly the same no matter what company you buy it through

Umbrella Excess Liability
All auto and homeowners policies limit the amount of liability coverage you can but to $500,00 or $1,000,000 depending on the company. Many people need much higher limits to protect their assets. An umbrella policy allows you to buy additional limits of liability in increments of $1,000,000. This increases the liability of both your auto and home basic policies. The cost of an umbrella is based on how many homes, rentals, and autos you have. An average cost for one home and two autos is $120.00 per year. You may also purchase an umbrella policy for your business, however minimum premiums are generally $500 to $1,000 per year.

Earthquake Insurance
All homeowner’s policies exclude earthquake, landslide and mudslide exposures. Many companies, but not all, will add earthquake coverage to your homeowners policy for an additional cost. Landslide and mudslide can not be purchased at this time. All companies have either a 5% or 10% deductible based on the insured value of your home. For example if you have a $200,000 home and have a 10% earthquake deductible then you would be responsible for the first $20,000 in the event of a loss. While this seems to be a large amount it keeps the coverage affordable. The time to buy is before the ground starts shaking. Whenever there is a tremor of 5.0 or greater, most companies stop writing new coverage for up to 90 days after the event. To qualify your home foundation must be bolted to the foundation and your water heater must be strapped to the wall. Most policies exclude damage to brick and masonry exterior facing.

Commercial Insurance
The basic purpose of business insurance is to protect the owner of the business, be it individual, partnership, corporation or LLC from claims arising out of bodily injury or property damage to others caused by the actions of products of a business. Even though all policies have their limitations and exclusions, each of the various types of business insurance take part in meeting this purpose. General liability, commercial auto, and workers compensation are three of the most common policies purchased by businesses. Other types of policies are available depending on the specific needs of a business. This information is general in nature. Talk to us to determine the needs of your business.

Commercial Employment Practices Liability
The employer-employee relationship is undergoing great legal scrutiny and employment related claims are escalating in areas such as sexual harassment, wrongful termination, discrimination, etc. These claims can come from both current and former employees, as well as job applicants! The procedures that employers do and don't use in hiring, firing, and managing their employees can translate into huge price tags for defense costs and legal awards to plaintiffs for errors that are inadvertently made. Employment related practices lawsuits have escalated substantially in the last few years. You can find news articles on a daily basis regarding discrimination (related to sex, age, race, religion, etc.), harassment, wrongful termination, failure to promote, failure to employ, and violations of the Americans With Disabilities Act (ADA) at the workplace. Indeed, lawsuits are everywhere. The amounts being awarded are staggering. Attorneys unfamiliar with this type of litigation are attending seminars to learn how to successfully win these cases! As this coverage is typically excluded from your general liability policy, the insurance industry has responded to a need for employer protection and has created an insurance policy designed to respond to employment related practices claims. There are several different policies on the market with different terms and conditions. The employer who exercises the tightest control of his/her office procedures will find the broadest coverage available. Different limits, deductibles, and copayments are offered to enable the employer to choose something they can be comfortable with.

Commercial Liquor Liability
Liquor liability insurance provides coverage for bodily injury or property damage for which an insured may be held liable by reason of the following: Causing or contributing to the intoxication of any person; Furnishing alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or Violating any statute, ordinance, or regulation relating to the sale, gift, distribution, or use of alcoholic beverages. This coverage applies only if the insured is involved in the following activities: Manufacturing, selling, or distributing alcoholic beverages; Serving or furnishing alcoholic beverages for a charge, whether or not such activity requires a license or is for the purpose of financial gain or livelihood; or Serving or furnishing alcoholic beverages without a charge, if a license is required for such activity.

Commercial Products Liability
The liability for bodily injury or property damage incurred by a merchant or manufacturer as a consequence of some defect in the product sold or manufacturered or the liability incurred by a contractor after he has completed a job as a result of improperly performed work. The latter described part of products liability is called Completed Operations.

Commercial Fire Legal Liability
Coverage needed if you occupy leased or rented property for which you could be held legally liable for damage to the property due to fire or explosion.

AAIS--American Association of Insurance Services
The rating bureau for inland marine, aircraft hull and package insurance fields for insurers choosing to participate. Formerly Transportation Insurance Rating Bureau. Headquarters: Bensenville, IL.

Absolute Liability
Liability that exists and is imposed upon a party, even though no negligence or fault was committed by that party. Absolute liability is most often imposed when the circumstances of the operation, product, or activity are considered highly hazardous or dangerous

Accident Insurance
Insurance covering death, dismemberment, loss of sight, loss of income, and medical expenses caused by accidental injury

Accident Only Insurance
Policies issued to cover death, dismemberment and medical services for accidents only.

Accident and Sickness Insurance
A broad term describing protection from loss because of illness or injury which may result in loss of life, loss of earnings, or expenses incurred. Within the broad area of health insurance, there are several major coverages which focus on more specific needs. (See disability income insurance, health insurance, hospitalization insurance, and sickness insurance.)

Accidental Death and Dismemberment Insurance (AD&D
A specific type of life insurance policy that pays benefits in the case of the death or dismemberment of the insured from accidental causes. If dismemberment occurs, benefits are paid on a periodic basis, such as weekly, bi-weekly or monthly for the injury; and the amount of payment of the benefits is based on the type and severity of the dismemberment.

Accidental Death Insurance
A life insurance policy that pays a benefit only in the event that death was accidental.

Accountants Professional Liability Insurance
accountants professional liability insurance

Accounts Receivable Insurance
Coverage that protects businesses against their inability to collect their accounts receivable because of the loss of supporting records that have been destroyed by a covered cause of loss. Also covered are the extra collection expenses that are incurred because of such loss or damage and other reasonable expenses incurred to re-establish records of accounts receivable after loss or damage

Actuaries and Pension Consultants Professional Liability
Professional liability insurance developed for actuaries and pension consultants and their unique and special needs

Additional Living Expense Insurance
Insurance for the extra amount it costs an insured to live until repairs are made to the insured's dwelling.

Adjusters Errors and Omissions Insurance
A type of insurance designed to provide coverage for adjusters for their errors, omissions, or negligent acts committed while performing the functions of their job. This coverage is available for individuals, firms or insurers

Admiralty Liability
The liability posed by the combination of both common and statutory law, as it relates to maritime operations and activities.

Admitted Liability
An aviation specific coverage for passengers or guests aboard aircraft, which precludes the need for those guests or passengers to prove the liability of the insured owner or operator of the aircraft in order to recover for damages suffered in an accident. This coverage is normally written with a maximum limit per seat, and the passenger or guest can recover up to that amount

Admitted Reinsurance
Reinsurers that have been admitted to operate in the states in which they are accepting cessions from primary insurers.

Advertisers Liability Insurance
Covers an insured against claims for libel, slander, defamation, infringement of copyright, invasion of privacy, etc., arising out of its advertising program. Also available for radio and television stations and advertising agencies

Agency Reinsurance
A very specific type of reinsurance arrangement in which a contract is drawn between insurer and reinsurer covering only the specified business that is produced by a specific agent of that ceding insurer.

Agents Errors and Omissions Insurance
A type of professional liability insurance designed for agents covering professional acts, errors, and omissions that may occur during the performance of their duties as an agent.

Aggregate Excess Insurance
Coverage developed for operations that prefer to self-insure a portion of their losses, capping at a specified amount. When the accumulation of losses exceeds the threshold amount during any annual period, the remainder of losses up to the policy limit are covered by this type of insurance.

Aggregate Excess of Loss Reinsurance
A company wishing to protect itself in the event its net loss ratio for a given year rises above a certain percentage, may buy reinsurance which pays in excess of that figure up to a higher agreed percentage beyond which the company is once more liable. In short, a plan which takes the sting out of an above-average net loss ratio. Also known as stop loss reinsurance or excess of loss ratio reinsurance.

Aggregate Working Excess Reinsurance
Treaty reinsurance in which the ceding insurer retains a portion of each risk plus an aggregate amount of loss in excess of each retention.

Agricultural Equipment Insurance
An inland marine policy tailored to insure the equipment found on a farm or ranch. Available with causes of loss on an "all-risk" or "specified cause of loss" basis.

AIA--American Insurance Association
A trade association of primarily stock property and casualty insurers that performs numerous functions, such as fire and accident prevention, reviews of insurance legislation, research, setting of building and fire department standards, arson and fraudulent claims investigations, etc. Headquarters: Washington, DC.

Air Cargo Liability Insurance
Coverage for the legal liability of an air carrier for loss or damage to cargo while in its care, custody or control.

Air Passenger Insurance
Life insurance purchased at airports by passengers on scheduled airlines. The face value of the policy is paid to the beneficiary in the event of death on that particular flight. Also called air travel insurance.

Air Travel Insurance
Life insurance purchased at airports by passengers on scheduled airlines. The face value of the policy is paid to the beneficiary in the event of death on that particular flight. Also called air passenger insurance.

Aircraft Hull Insurance
Covers any loss arising out of physical damage to the aircraft itself in flight, on the ground, or both.

Aircraft Insurance
A type of package policy for aircraft which combines both the property insurance for the hull and coverage for bodily injury and property damage liability arising out of the ownership or use of the insured aircraft.

Aircraft Liability Insurance
Covers the insured for both bodily injury and property damage liability arising out of the ownership or use of the insured aircraft.

Aircraft Passenger Liability Insurance
Covers the liability resulting from bodily injury and sickness or disease suffered by any passenger arising out of the ownership or use of the insured aircraft.

Aircraft Product Liability Insurance
Coverage required by a manufacturer of aircraft, components or equipment. Also those involved in selling aircraft, parts or fuel, or engaged in repair or maintenance of aircraft. This policy protects these various parties against claims arising from injury or damage caused by defects in the products sold or manufactured or from improperly completed operations.

Aircraft Spare Parts Insurance
"All-risk" coverage for leased aircraft parts, such as engines, spare parts and equipment, while the property is on the ground or being carried as cargo by air, land or waterborne transit.

Airport Liability Insurance
Covers the liability arising out of the ownership or maintenance of premises, normally a hangar located at either a municipal or private airport.

Alcoholic Beverage Liability Insurance
More commonly called liquor liability insurance or dram shop liability insurance, this coverage is for owners and operators of a business that sells or serves liquor. This coverage was designed to protect against liability for accidents caused by intoxicated customers.

Ambulance Service Malpractice Insurance
Professional liability coverage for ambulance drivers, EMTs, and attendants for bodily injury, mental injury, or death to patients caused by error, omission, or negligence in the services rendered in the course of their professional duties.

American Association of Insurance Services (AAIS)
The rating bureau for inland marine, aircraft hull and package insurance fields for insurers choosing to participate. Formerly Transportation Insurance Rating Bureau. Headquarters: Bensenville, IL.

American Cargo War Risk Reinsurance Exchange
An association of companies writing ocean marine business, formed for the purpose of reinsuring war risks on ocean cargoes. The reinsurance facilities established by this organization permitted member companies to provide automatic cargo coverage to importers and exporters even during the worst part of World War II. Headquarters: New York, NY.

American Council of Life Insurance
A public relations organization representing legal reserve life insurance in legislative and administrative matters at federal, state and municipal levels of government. Conducts economic and social research programs, compiles statistics, and publishes pamphlets and consumer booklets. Headquarters: Washington, DC.

American Hull Insurance Syndicate
An association of insurance companies writing hull, war risk and builders risk coverage on larger commercial vessels. Formed to provide a ready and sufficient market for American and foreign ships. Management issues its own policies and settles losses on behalf of subscriber companies. Headquarters: New York, NY

American Institute for Property and Liability Underwriters, Inc.
An insurance educational organization which establishes insurance educational standards and fosters educational work. Those properly qualified persons who successfully pass the examinations this body prepares are awarded the designation "Chartered Property and Casualty Underwriter" (CPCU). Headquarters: Malvern, PA.

American Insurance Association (AIA)
A trade association of primarily stock property and casualty insurers that performs numerous functions, such as fire and accident prevention, reviews of insurance legislation, research, setting of building and fire department standards, arson and fraudulent claims investigations, etc. Headquarters: Washington, DC.

American Mutual Insurance Alliance
Now called the Alliance of American Insurers. A trade association made up primarily of mutual property and casualty insurers, though as of September, 1977, membership was open to nonmutual companies. Fosters research and publishes educational materials, with headquarters in Schaumburg, IL.

American Risk and Insurance Association
An association of those engaged in teaching insurance and risk management in colleges and universities. Lay persons interested in the association's objectives of scholarly research in the fields of risk and insurance are also eligible for membership. Publishes a quarterly scholarly journal, "The Journal of Risk and Insurance." Formerly the American Association of University Teachers of Insurance. Headquarters: Athens, GA.

American Society of Insurance Management, Inc. (ASIM)
Now known as Risk and Insurance Management Society, Inc. (RIMS). Formed in 1950. A nonprofit association dedicated to the advancement of professional standards of risk management. RIMS sponsors educational programs and maintains relationships with insurers, brokers, rating organizations, and regulatory and governmental bodies. Headquarters, New York, NY.

Amount of Insurance
Based on the terms of a specific policy, the most an insurer will pay for any single loss. The maximum amount an insured can collect.

Animal Insurance
Life and health insurance for animals or livestock. (See poultry insurance (chickens).)

Animal Mortality Insurance
A type of animal life insurance that provides benefits for the death of the specified animal for any cause unless otherwise excluded. Coverage is normally very broad and the exclusions few, if any at all. (See livestock mortality insurance.)

Architects and Engineers Professional Liability Insurance
Protects architects and engineers against claims arising out of their professional services caused by error, omission or negligent acts.

Armored Car and Messenger Service Insurance
Specialty insurance designed specifically to cover the exposures of an armored car or messenger service while loading, transporting, storing, unloading, or otherwise, during the handling of money, gems, precious metals, stock certificates and other highly negotiable instrumentalities by the service.

ASIM--American Society of Insurance Management, Inc.
Now known as Risk and Insurance Management Society, Inc. (RIMS). Formed in 1950. A nonprofit association dedicated to the advancement of professional standards of risk management. RIMS sponsors educational programs and maintains relationships with insurers, brokers, rating organizations, and regulatory and governmental bodies. Headquarters: New York, NY.

Assessable Insurance
A type of insurance which may require the policyholder to contribute in the event the insurer becomes unable to pay its losses. Confined to certain mutual companies. Also known as assessable policies. (See assessment mutual and nonassessable policy.)

Association Captive Insurance Company
A captive insurance company that is formed by the members of an association to underwrite and provide insurance only for their own association members.

Association Group Insurance
Group insurance offering coverage to an association, much in the same manner that it would be offered to the employee group of an employer.

Association Professional Liability Insurance
Professional liability insurance for the directors, officers, and other members of an association while performing their duties on behalf of the association.

Assumed Liability
Contractual liability which arises from an agreement between people, as opposed to liability which arises from common or statute law.

Auctioneers Errors and Omissions Insurance
Insurance coverage designed for auctioneers to protect against claims resulting from negligent acts, errors or omissions of auctioneers in the performance of their business-related duties.

Automatic Reinsurance
A reinsurance agreement between reinsured and reinsurer (usually for pro rata reinsurance and usually for one year or longer) where the ceding company is obligated to cede certain risks as provided in the agreement and the reinsurer is obligated to accept. Also known as an automatic treaty.

Automobile Insurance
Any kind of insurance pertaining to the ownership, maintenance, or use of automobiles.

Automobile Insurance Plan
An association of insurers in a given state in which automobile risks unable to get insurance in the voluntary market are shared among subscribing insurers in proportion to the amount of automobile liability insurance each insurer writes in that state. All companies writing this class are required to participate in this activity, currently administered by the Automobile Insurance Plans Service Office, headquartered at Johnston, RI. Long identified as "assigned risk plans," such plans sometimes take the form of joint underwriting associations.

Automobile Lliability Excess Policy
Provides excess limits for bodily injury and property damage liability for persons unable to secure more than minimum limits under their basic automobile liability insurance. Primarily purchased by assigned risk plan policyholders, the excess insurance always stipulates that the primary policy must be kept in force.

Automobile Liability Insurance
Protection for loss incurred through legal liability for bodily injury and damage to property of others caused by accidents arising out of ownership, maintenance or use of an automobile.

Automobile Medical Payments Insurance
An optional coverage under an automobile liability policy which pays the medical expenses of the policyholder and any of the passengers injured by the insured automobile, irrespective of who was responsible for the accident. This was originally called "basic medical payments." In addition, it pays the medical expenses of the policyholder and members of the immediate family injured while passengers in any other automobile or when struck by an automobile. In some no-fault states, medical payments insurance has been replaced by personal injury protection (PIP); in other states, it may supplement no-fault insurance. (See personal injury protection (PIP).)

Automobile Physical Damage Insurance
Material damage insurance covering loss or damage to the policyholder's automobile. (See combination automobile policy.)

Aviation Insurance
A broad field of protection covering both domestic and international operations of aircraft owned and used, involving hulls, liability, passenger liability, and airport and hangerkeeper's liability.

Aviation Passenger Liability Insurance
Insurance protection for the operators of aircraft, in the event of an accident where a passenger(s) is injured, killed or disabled while on a covered aircraft.

Additional Term Insurance Option
Sometimes called the fifth dividend option in a participating life insurance policy, paid dividends are entered as a single net premium to purchase one-year term insurance.

Adjustable Life Insurance Policy
A form of life insurance where the insured is permitted to adjust either their insurance coverage or premiums. The effect of increasing premiums without increasing coverage is that more cash tends to accumulate. Keeping coverage the same while decreasing premium will make the policy look more like term insurance because there will be less cash accumulation. Universal life is also called flexible premium adjustable life insurance.

Annual (yearly) Renewable Term Insurance
A term life insurance policy that the insured can renew for a specific number of years without proving insurability. Each year the policy’s premium increases. (See also yearly renewable term.)

Assumption Reinsurance
An insurance company may want to eliminate a block of business. It could effectively "sell" that block of business to another company through assumption reinsurance. The assuming company (reinsurer) takes over all responsibility for the policies and the ceding company is no longer a party to the contracts for that block of business.

Association of Insurance Compliance Professionals
Originally called the Society of State Filers, this organization serves members from property, casualty, life and health insurers, regulatory agencies, consultants and other specialty operations who have an active interest in insurance compliance. It provides a host of compliance-related educational and networking opportunities. Headquarters: Reston, VA.

Bailee Customers Iinsurance
Insurance arranged by a bailee for the account of bailors or customers. An example is the insuring of furs in a storage warehouse arranged by the warehouse bailee for the benefit of the owners of the furs.

Bailees Liability Coverage
Normally, this is an inland marine insurance, despite the title. This type of coverage is designed for a bailee to provide coverage for liability for the property of customers, in that bailee's care, custody or control. Although this coverage was designed to cover the bailee's liability exposure, it can often be endorsed or have options exist to provide a no-fault coverage to protect the customer's property against any damage, whether or not there is negligence and subsequent liability.

Bank Burglary and Robbery Insurance
Specially designed coverage for banks providing burglary, robbery, vandalism and malicious mischief into a single package policy. It can be written either primary or excess but is most often written on a primary basis for small banks and on an excess basis for larger banks.

Blanket Insurance
1) A single amount of insurance covering several items, e.g., one amount of insurance to cover two buildings, or one building and its contents. Such policies usually require the fulfillment of certain restrictions which may not be required in "specific" or "itemized" policies, such as the use of a 90% coinsurance clause. 2) In the case of health insurance, a policy or contract covering an entire specified group of people (such as employees) against a listed set of hazards or perils (for example, for medical or dental protection).

Blood Bank Professional Liability Insurance
Coverage designed for owners and operators of blood banks against negligence, errors or omissions arising out of alleged malpractice, rendering or failing to render professional services, or mistake in taking, handling, processing, storing, or distributing blood products.

Bloodstock Insurance
Livestock mortality coverage for high-value racing horses and prize show horses (both stallions and brood mares).

Board of Education Liability Insurance
Liability protection for elected or appointed members of school boards, including administrators, teachers and other employees. Coverage is for alleged damages to third parties resulting from the negligence, wrongful acts, errors and omissions occurring during the performance of duties with respect to schools boards or boards of education.

Bodily Injury Liability Insurance
A form of "third-party" protection covering the insured's legal liability for bodily injury to others caused by the insured's negligence. (See liability insurance.)

Boiler and Machinery Insurance
Protection against loss from disruption of boilers and machinery by an insured peril: loss to the boiler and machinery itself, damage to other property, business interruption losses, or all three. Also known as machinery breakdown insurance.

Fire Insurance
1) Covers losses caused by fire, lightning and removal of insured property from the premises to avoid further loss. All resultant damage such as that done by water and smoke is also covered. Usually supplemented by extended coverage. Currently, this insurance is referred to as property insurance. 2) A type or line of insurance, as opposed to marine, casualty or fidelity bonding. The term fire insurance is now referred to as property insurance when denoting a line of insurance.

Boiler and Machinery Insurance
Protection against loss from disruption of boilers and machinery by an insured peril: loss to the boiler and machinery itself, damage to other property, business interruption losses, or all three. Also known as machinery breakdown insurance.

Fire Iinsurance Company
An insurance company chartered and licensed under the fire insurance provisions of the laws of its home state, as opposed to one under the casualty section. Since the term fire insurance has been replaced in many state laws with property insurance, its legal use is limited; but fire insurance is still applied in a colloquial sense to describe those companies engaged principally in the property insurance business.

Broadcasters Liability Insurance
Insurance designed to protect radio and television stations from errors and omissions which may occur during the production of, use of, or broadcast of programs and advertising.

Burglary and Theft Insurance
Insurance against loss of property (from the various types of theft or damage) caused by burglary or theft.

Business Income Insurance
A time element coverage which pays for loss of earnings or income when business operations are interrupted, curtailed or suspended due to property loss as a result of an insured cause of loss. Also covered are loss of rents and rental value. Extra expenses incurred to continue operations at another location are included as long as they reduce the total amount of loss. (See gross earnings form, use and occupancy, and business interruption insurance.)

Business Interruption Insurance
A time element coverage which pays for loss of earnings when business operations are curtailed or suspended due to property loss as a result of an insured cause of loss. This coverage is now obsolete and has been replaced by a more comprehensive and generic business income insurance. (See time element insurance and business income insurance.)

Business Continuation Insurance
Should one partner/corporate officer, etc., die or become disabled, business continuation insurance provides cash to the surviving partners/stockholders to continue the business and/or purchase the stock or interest of the deceased partner.

Capital Stock Insurance
Insurance business transacted by an insurer whose ownership element is divided into shares of stock represented by certificates, as opposed to a mutual insurer which does not have capital stock and whose ownership element is divided among its policyholders. While a stock insurer has both stockholders (its owners) and policyholders (its customers), a mutual insurer has only policyholders (its owners and customers). (See mutual insurance and mutual insurance companies.)

Captive Insurance Company
A company which is wholly owned by another organization (generally non-insurance), the main purpose of which is to insure the risks of the parent organization. A pure captive is owned by a single parent, while an association captive is owned by a group of companies usually in the same line of business.

Cargo Insurance
A generic term used in both inland marine and ocean marine insurance to designate the types of insurance available to provide coverage for cargo that is being transported by truck, rail, air, ship or boat.

Carriers Legal Liability
An insurance policy designed to provide coverage for the bailee exposure of cargo carriers that would result from damage to property of others that has been entrusted to the carrier for transport.

Casualty Insurance
Insurance concerned with legal liability for personal injuries or damage to property of others, including many other types of insurance, such as workers compensation, plate glass, burglary, boiler and machinery, aviation, etc. "Casualty" is generally accepted to cover all classes outside the definition of "property insurance," so that a property and casualty company would tend to handle all forms of insurance other than life.

Catastrophe Reinsurance
1) In reinsurance, a form of excess of loss reinsurance which, subject to specified limits, indemnifies the ceding company for the amount of loss in excess of a specified retention, with respect to an accumulation of losses resulting from a catastrophic event or series of events. 2) In primary insurance, an amount of coverage on a single risk or group of risks in excess of self-retention or other primary insurance. (See catastrophe (excess) cover.)

Cemetery Professional Liability Insurance
Liability coverage specifically designed to meet the needs and exposures of owners or operators of a cemetery to protect for damages suffered by third parties, as a result of the rendering or failing to render professional services as the owner, operator, management or staff of a cemetery.

Certificate of Insurance
A short-form documentation of an insurance policy.

Certificate of Reinsurance
The certificate issued by reinsurers to confirm the reinsurance transaction. It is a form of an insurance contract as it contains the terms and conditions of the reinsurance transaction, as well as details as to who, what, where, and when coverage applies to that cession.

Certified Insurance Counselor (CIC)
A professional insurance designation designed originally for agents and brokers but now available to all types of insurance professionals who wish to pursue the intensive workshops, seminars and testing program covering a variety of commercial and personal insurance issues. The ultimate goal is a comprehensive understanding of the insurance needs and coverages available to meet the needs of clients. In order to keep this designation active, the CIC must complete update studies at set, periodic intervals. Sponsored by: Society of Certified Insurance Counselors, 3630 N. Hills Dr., P.O. Box 27027, Austin, TX 78755-1027, phone: (512) 345- 7932.

CGL--Commercial General Liability Policy
The commercial general liability policy provides comprehensive general liability coverage for commercial risks covering all liability exposures for all locations and causes of loss except those specifically excluded or limited either within the coverage form or by endorsement. Protection may be provided on either an occurrence type of policy or on a claims-made basis.

Charter Fare Protection Insurance
A specially designed insurance coverage for persons who have paid for the cost of a trip or tour. This policy provides coverage for individual insureds who are unable to participate in the specified trip or tour should an accident, injury, sickness, death or other covered incident occur. Coverage is also provided for expenses should the insured become ill or suffer a covered event while on the trip or tour and need to return home prior to the end of the trip or tour. Also known as trip cancellation insurance.

Charters Liability Insurance
Liability coverage for parties or individuals who lease a vessel from another party.

Chattel Mortgage Non-Filing Insurance
A coverage designed specifically for banks and lending institutions to protect against any financial loss that may occur when that bank or institution is not able to obtain possession of property used as collateral in a chattel mortgage or similar loan. The bank or institution is also protected when it cannot enforce its rights under a chattel mortgage, loan or instrument because of non-filing with the proper public authority.

CIC--Certified Insurance Counselor
A professional insurance designation designed originally for agents and brokers but now available to all types of insurance professionals who wish to pursue the intensive workshops, seminars and testing program covering a variety of commercial and personal insurance issues. The ultimate goal is a comprehensive understanding of the insurance needs and coverages available to meet the needs of clients. In order to keep this designation active, the CIC must complete update studies at set, periodic intervals. Sponsored by: Society of Certified Insurance Counselors, 3630 N. Hills Dr., P.O. Box 27027, Austin, TX 78755-1027, phone: (512) 345- 7932.

CIF (cost, insurance and freight)
This refers to a common term in a sales contract that may be encountered in international trading when ocean marine travel is used. In this type of contract, the selling price includes the cost of the goods, all shipping charges and the cost of marine insurance. Although the seller is obligated to purchase marine insurance, the seller's responsibility for the goods ends when the goods have been delivered to the marine carrier or have been delivered on board the shipping vessel, depending upon the terms of the contract.

Clergy Professional Liability
Professional liability for clergy members for claims that might arise out of rendering or failing to render services related to their professional duties, including counseling.

Closure and Post-Closure Insurance
Insurance coverage that is purchased to protect owners and operators of hazardous waste treatment, storage and disposal facilities, in response to the Resource Conservation and Recovery Act of 1976 (RCRA).

COIL--Conference of Insurance Legislators
An organization of state legislators that specialize in insurance legislation.

Coinsurance
1) In property insurance, a clause requiring the insured to maintain insurance at least equal to stipulated percentage of value in order to collect partial losses in full. If the insurance is less than the minimum required, that proportion of the loss will be paid which the amount of insurance carried bears to the amount which should have been carried. Symbolically: Insurance Carried x Loss = Payment (subject to policy limit) Insurance Required 2) In major medical insurance, the clause that specifies the percentage of a loss which the company will pay and the percentage which the insured will bear (e.g., 80­20, 75­25).

Coinsurance Clause
1) In property insurance, a clause requiring the insured to maintain insurance at least equal to stipulated percentage of value in order to collect partial losses in full. If the insurance is less than the minimum required, that proportion of the loss will be paid which the amount of insurance carried bears to the amount which should have been carried. Symbolically: Insurance Carried x Loss = Payment (subject to policy limit) Insurance Required 2) In major medical insurance, the clause that specifies the percentage of a loss which the company will pay and the percentage which the insured will bear (e.g., 80­20, 75­25).

Collateral Protection Insurance
Insurance policies designed specifically to meet the exposure needs of financial institutions, by covering physical damage losses to collateral held by the lenders of loans.

College of Insurance, The
An accredited collegiate institution offering an associate degree with majors in various aspects of the insurance business, a Bachelor of Business Administration degree with an insurance major, a Bachelor of Science degree in actuarial science, and a Master of Business Administration degree with an insurance major. Offices are in New York City.

Collision Insurance
Coverage for the loss resulting from the striking of another object by a moving vehicle.

Commercial General Liability Policy (CGL)
The commercial general liability policy provides comprehensive general liability coverage for commercial risks covering all liability exposures for all locations and causes of loss except those specifically excluded or limited either within the coverage form or by endorsement. Protection may be provided on either an occurrence type of policy or on a claims-made basis.

Commissioner of Insurance
The official of a state charged with the duty of enforcing its insurance laws. Also called the superintendent of insurance (in three states) and director of insurance (in eight states). The official is elected in 11 states, appointed by a governor or state agency in 38 states, and is a civil service appointee in Colorado.

Compensation Insurance
Protection which provides various benefits to employees for any injury or contracted disease arising out of and in the course of employment. All states have laws which require such protection for workers and prescribe the length and amount of such benefits that are provided. Originally, workers ceded their rights to sue in exchange for worker's compensation benefits, but in recent years lawsuits have successfully eroded this concept.

Comprehensive Automobile Liability Policy
The broadest form of business coverage for claims alleging bodily injury or property damage resulting from the insured's ownership, maintenance or use of an automobile. The premium, which is adjusted (audited) at the expiration of the policy term, is based on the insured's actual exposure during the policy term.

Comprehensive General Liability Policy
Revised and now known as the commercial general liability policy--provides comprehensive protection for commercial risks covering all liability exposures for all locations and causes of loss except those specifically excluded or limited either within the coverage form or by endorsement. Protection may be provided on either an "occurrence" type of policy or on a "claims-made" basis.

Comprehensive Major Medical Insurance
Coverage designed to provide protection including that which is otherwise contained in both the basic and the major medical insurance policies. A relatively small dollar amount deductible is found in this type policy, as well as coinsurance. Dollar amounts of the benefits provided are normally higher than those found in either a basic or a major medical policy by themselves.

Comprehensive Personal Liability
A form of liability insurance which reimburses the policyholder, if liable, to pay money for damage or injury caused to others. This form does not include automobile liability but does include almost every activity of the policyholder except such as may arise from the operations of a business, hence "personal" liability. The coverage is a part of either homeowners or tenants policies and is almost obsolete as a separate policy.

Compulsory Insurance
Coverage required by certain states of certain people in certain circumstances, e.g., workers compensation and automobile liability.

Concurrent Insurance
Coverage in one policy on the same property under the same conditions as another policy.

Conference of Insurance Legislators (COIL)
An organization of state legislators who specialize in insurance legislation.

Contact Lens Insurance
Reimburses for replacement of lost or damaged contact lenses.

Contingent Liability
1) A liability which may be incurred by an insured as a result of negligence on the part of independent persons engaged to perform work. The most common example is the contingent liability of a principal contractor, which may result from construction operations undertaken by subcontractors. Also applies to the liability of a principal for the acts of an agent or servant. (See protective liability insurance.) 2) In property damage insurance, the possibility of financial loss to a policyholder, resulting from damage or loss to the property of another, such as a supplier or a customer.

Contractors Protective Liability
A policy which provides liability coverage for the insured for the negligent acts of contractors and subcontractors hired by the insured. May also cover for their own negligent supervision of the work performed.

Contractors Protective Liability
A policy which provides liability coverage for the insured for the negligent acts of contractors and subcontractors hired by the insured. May also cover for their own negligent supervision of the work performed.

Contractual Liability
A legal obligation voluntarily assumed under the terms of a contract, as distinguished from liability imposed by the law (legal liability).

Contractual Liability Insurance
Insurance coverage to provide protection for the additional liability exposure an insured has assumed in a contract. Only specified contractual liability exposures are covered in standard liability policies for items such as leases and related types of contracts because the assumption of such liability in a contract is not only voluntary, but may be extensive. When contractual liability insurance is purchased, the contracts covered must be individually evaluated for the type and amount of exposure posed.

Contributory Group Insurance
Group insurance in which all or part of the premium is paid by the employee or group member, with any remainder being paid by the employer or union. In noncontributory insurance, the employer pays all the premium without any contributions from employees.

Continuous Premium Whole Life Insurance
Life insurance that is payable for the life of the insured. Most whole life insurance policies are continuous premium whole life insurance because premiums are payable for life or until age 100, whichever comes first.

Cost, Insurance and Freight (CIF)
This refers to a common term in a sales contract that may be encountered in international trading when ocean marine travel is used. In this type of contract, the selling price includes the cost of the goods, all shipping charges and the cost of marine insurance. Although the seller is obligated to purchase marine insurance, the seller's responsibility for the goods ends when the goods have been delivered to the marine carrier or have been delivered on board the shipping vessel, depending upon the terms of the contract.

County Clerks and Recorders Errors and Omissions Insurance
Insurance protection designed to protect against the liability exposures of county clerks and recorders for losses as a result of the rendering or failing to render official services and duties, including negligent acts, errors, and omissions of the insured and employees.

Credit Card Insurance
Covers against losses stemming from the misuse of lost or misappropriated credit cards. Usually written for individuals as an endorsement to the homeowners policy, but is also offered to business corporations as a separate contract or as part of forgery of comprehensive crime policies.

Credit Health Insurance
A form of health insurance to provide payments in case of disablement of debtors with respect to the amount owed on installment loans. If the debtor becomes disabled, the insurance will provide continued monthly payments, either to the end of the loan or for a specified number of months.

Credit Insurance
1) A form of life and health insurance protecting the lender against loss from death or disability of the borrower, often written as group insurance. The coverage can be written to protect the interest of the creditor only (single interest), or the interests of both creditor and debtor (dual interest). (See single interest cover (or insurance) and margin account insurance.) 2) Protection against loss caused by the insolvency of a firm's customers in excess of its normal credit losses; written by a few specialty casualty insurers. (See floor plan insurance.)

Credit Life Insurance
A form of life insurance to provide payments in case of death of debtors with respect to the amount owed on installment loans. In case of death of the debtor, the insurance pays the balance of the loan.

Crop Dusting and Spraying Liability Insurance
Protection against claims alleging bodily injury or property damage arising from the normal business operations of crop dusters.

Crop-Hail Insurance
Insurance against hail damage to growing crops. Although hail is the basic peril in these policies, cover is often granted for crop damage resulting from additional perils such as fire, windstorm, lightning, drought, frost, excessive heat, snow, sleet, etc.

Crop-Hail Insurance Actuarial Association
Rating organization, statistical and research association for crop-hail insurance and rain insurance on public events, business ventures and private proceedings. Headquarters: Chicago, IL.

Crop Insurance
Insurance against hail damage to growing crops. Although hail is the basic peril in these policies, cover is often granted for crop damage resulting from additional perils such as fire, windstorm, lightning, drought, frost, excessive heat, snow, sleet, etc.

Cross Liability Coverage Endorsement
Most liability policies will not respond to claims between two or more insureds covered by the same insurance policy whether they be named insureds or additional insureds. This endorsement adds coverage for insureds who make a claim against another insured under specific circumstances. It is important to note that this endorsement does not increase the insurance company's overall limit of liability.

Cumulative Liability
Relates to fidelity bonds where a substantial claim could be made under a canceled bond containing a discovery period and also under another bond replacing it, since defalcations of dishonest employees often are spread over lengthy periods. To avoid this cumulative liability which could expose a surety company to a loss totaling the sum of two bonds, a clause--the superseded suretyship rider--is used, which picks up any liability under the prior bond and bars possibility of an accumulation of liability between the two bonds if issued by the same company.

Custom Brokers and Freight Forwarders Errors and Omission Insurance
Special insurance policies designed for custom brokers which provide coverage for liability as a result of errors, omissions, or negligence in arranging for the clearance and forwarding of imports of behalf of the importer.

Film Coverage Insurance
An inland marine coverage providing protection for broad or "all-risk" causes of loss to exposed motion picture, magnetic or video tapes, which also include sound tracks and recordings.

Federal Insurance Administration
A government office (part of the Department of Housing and Urban Development) handling insurance programs such as the Federal Riot and Civil Commotion Reinsurance Contract (which backs up policies provided by FAIR Plans in force in a number of states), Federal Crime Insurance and the Federal Flood Insurance Program.

Convertible Term Insurance
Term insurance that is convertible to a higher premium paying plan (usually whole life) without evidence of insurability. Convertible term insurance can be convertible without medical examination for only a limited part of its term, e.g., a ten-year convertible term policy may be convertible only during the first seven years of the term.

Current Assumption Whole Life Insurance
This type of policy deviates from the whole life concept where premiums remain level. With current assumption whole life insurance, the premium payments are flexible and are linked to current interest rates. Premium adjustments are usually made on specific policy anniversary dates. Premium adjustments come from higher or lower mortality, expenses or investment returns of the insurer.

California Insurance Wholesalers Association (CIWA)
An insurance trade association organized to promote education and good business practices, and to represent the interest of their members with insurance companies and vendors. Headquarters: Montrose, California.

Captive Insurance Company Association (CICA)
An association formed to educate persons working for or interested in captive insurance companies. It provides information, education and support services for both domestic and foreign captives. Headquarters: Minneapolis, MN.

CICA--Captive Insurance Company Association
An association formed to educate persons working for or interested in captive insurance companies. It provides information, education and support services for both domestic and foreign captives. Headquarters: Minneapolis, MN.

CIWA (Califorina Insurance Wholesalers Association)
An insurance trade association organized to promote education and good business practices, and to represent the interest of their members with insurance companies and vendors. Headquarters: Montrose, California.

Fiduciary Liability Insurance
Protection for those who administer pension and welfare funds, profit-sharing and other employee benefit programs against loss for errors and omissions by the administrator. The need for this coverage was created by the Employee Retirement Income Security Act (ERISA) of 1974. Also known as pension trust liability insurance. (See Employee Retirement Income Security Act of 1974 (ERISA).)

Cyber Insurance
A special form of commercial insurance created to protect businesses against cyber (Internet) risks, such as hackers and other breaches of computer system security.

Charterer's Liability
A form of liability coverage that protects against the loss exposures faced by entities that charter (rent out) vessels.

Communications Liability
(See Media Professional Liability.)

Fine Arts Insurance
A personal lines coverage on works of arts, usually written by inland marine underwriters on an "all-risk" and a "valued" basis. The commercial lines equivalent is most often covered under a commercial articles floater which combines not only fine arts coverage, but also camera and musical instruments in one coverage form.

Certified Insurance Data Manager
A professional designation awarded by the Insurance Data Management Association (IDMA). The designation recognizes a person's successful completion of courses and training in properly managing the information (particularly reporting system) needs of a modern insurance operation.

Council of Insurance Agents and Brokers
Established in 1913 as the NAIB, this organization is a trade association that is composed of the largest United States agents and brokers who handle property and casualty insurance and employment benefits. Headquarters: Washington D.C.

Damage From Strikers Insurance
A special commercial property insurance policy designed to provide coverage for employers for damage and loss caused by vandalism or sabotage of strikers.

Data Processing Equipment Insurance
Most often, an inland marine coverage form, for "all-risk" protection on equipment, software, extra expenses incurred as a result of the failure of such equipment caused by an insured loss, and loss of earnings. Also known as an "EDP" policy. May be extended to cover liability claims alleging errors and omissions by data processing companies. This coverage is known as data processors errors and omissions insurance. (See data processors errors and omissions insurance and EDP insurance.)

Data Processors Errors and Omissions Insurance
A special liability insurance policy designed to provide protection for insureds who offer data processing services to others. Coverage is for injury and damages resulting from negligent acts and errors or omissions in the rendering or failing to render of data processing service on the financial data or financial records of others. (See data processing equipment insurance and EDP insurance.)

Debit Insurance
Insurance (usually life insurance) written in small amounts, the premium for which is payable in frequent installments (usually weekly or monthly) and collected by an agent known as a debit agent. The payment frequency and collection facilities were designed decades ago to accommodate workers at industrial factories who were paid weekly. Also called industrial insurance.

Decreasing Term Life Insurance
A life insurance policy in which the death benefit starts out at the full stated amount but declines on a set scale throughout the life of the policy, reaching zero at the end of the policy term.

Deferred Life Insurance
Life insurance policies designed to pay a higher death benefit after a specified period to allow the benefits to become vested.

Demolition Insurance
Insurance against the cost of removing the ruins of a building partially destroyed by an insured peril, when required by some city ordinances.

Dental Insurance
Health insurance coverage for specified dental services, most often provided on a group basis.

Dentists Professional Liability Insurance
Insurance designed to cover the professional liability exposures of dentists that result from claims for bodily injury and/or personal injury which may occur from alleged malpractice, errors or omissions in the rendering or failing to render professional services.

Depreciation Insurance
Insurance which pays the difference between the depreciated value of property at the time it is damaged or destroyed by a covered cause of loss insured against, and the cost of replacing it with new property of similar kind and quality. Fast becoming obsolete and now provided for in replacement cost coverage of most personal and commercial property insurance policies.

DIC--Difference in Conditions Insurance
A property policy insuring "all risks" of physical loss or damage, excluding fire and extended coverage perils. Any cause of loss that would result in the property being left in a condition different from what it was prior to the occurrence of the loss event, except for those causes of loss specifically excluded. Such unnamed losses would include collapse, water damage, theft and (optionally) flood and earthquake. Often, this coverage is provided on an inland marine basis.

Difference in Conditions Insurance (DIC)
A property policy insuring "all risks" of physical loss or damage, excluding fire and extended coverage perils. Any cause of loss that would result in the property being left in a condition different from what it was prior to the occurrence of the loss event, except for those causes of loss specifically excluded. Such unnamed losses would include collapse, water damage, theft and (optionally) flood and earthquake. Often, this coverage is provided on an inland marine basis.

Director of Insurance
The official of a state charged with the duty of enforcing its insurance laws. Also called the superintendent of insurance and commissioner of insurance. The official is elected in 11 states, appointed by a governor or state agency in 38 states, and is a civil service appointee in Colorado.

Directors and Officers Liability Insurance
Protects officers and directors of a corporation against damages from claims resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation (and even the officers and directors in some cases) for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors. These policies always require the insured to retain part of the risk uninsured.

Disability Income Insurance
A form of coverage which provides benefits to employees disabled by sickness or accident not related to employment. An extension of workers compensation acts in New York, New Jersey, California, Hawaii, Puerto Rico and Rhode Island. (See accident and sickness insurance.)

Disability Insurance
A form of health insurance coverage which provides benefits in the form of income (usually weekly or monthly) to employees disabled by sickness or accident not related to employment. An extension of workers compensation acts in New York, New Jersey, California, Hawaii, Puerto Rico and Rhode Island. (See accident and sickness insurance.)

Dram Shop Lliability Insurance
A form of liquor liability coverage in which the basis for legal liability is a dram shop, liquor control, or alcoholic beverage law. The laws vary, but most provide that the owner of an establishment that serves alcoholic beverages is liable for injury or damage caused by an intoxicated person if it can be established that the liquor licensee caused or contributed to the intoxication of the person. (See liquor liability laws.)

Dependent Life Insurance
Optional and voluntary life insurance benefits on dependents and spouse of a member in a group insurance contract. Limits of coverage are generally lower than on the life of the dependent and the dependent may be responsible for all or a portion of the premium payments on dependent life insurance.

Deposit Term Insurance
A term insurance policy that, in the earlier years, has a higher premium than it does in the later years. In the beginning, the excess premium is considered savings, and this extra amount of money is set aside to earn interest. Later these dollars (interest plus the lump sum or deposit) will be used to reduce the premium payment. The entire deposit will be consumed in premium payments.

Disability Buy-Out Insurance
If a partner or officer/shareholder of a business becomes permanently disabled, the other owners may want to buy out that partner's or shareholder's interest in the business. A contract is formed between the owners and funded by a disability policy that will pay if one of the owners becomes permanently disabled for more than six months, one year, two years, etc. The payment is usually in the form of one lump sum or a series of large payments.

Earned Reinsurance Premium
The earned portion of the policy premium paid to a reinsurer by the primary or ceding company.

Earthquake Insurance
Insurance against damage by earthquakes and earth movement. Written most frequently on the Pacific coast.

EDP Insurance
An "all-risk" policy that provides protection on equipment, software and extra expenses incurred as a result of failure of such equipment caused by an insured loss and loss of earnings. Also know as an EDP policy. Coverage may be extended to include liability claims alleging errors and omissions by data processing companies. (See data processors errors and omissions insurance and data processing equipment insurance.)

Educators Professional Liability Insurance
Professional liability coverage specifically designed to offer protection for the hazards and exposures faced by educators, teachers, and school boards from claims or suits that may result from the acts, negligence, errors, omissions, rendering or failing to render of the professional services of school board members, faculty, staff, aides, or volunteers. Coverage for bodily injury resulting from corporal punishment is also available.

Elevator Liability Insurance
Liability coverage for elevators, escalators and other hoisting devices. This coverage is no longer written as a policy by itself but is now included in the standard commercial general liability coverage form.

Employee Benefit Plans Liability
Protects the insured employer against any claims made against him or her by employees or former employees caused by a negligent act, error or omission in the administration of the insured's employee benefit programs. Exposures such as providing incorrect advice concerning an employee's pension plan or failure to enroll employees under a benefit program are covered under this insurance. The coverage is provided either under a separate policy or as an endorsement to the employer's general liability policy.

Employers Liability Insurance
Coverage against the common law liability of an employer for injuries sustained by employees, as distinguished from liability imposed by a workers compensation law.

Employment-Related Practices Liability (ERPL) or Employment Practices Liability Insurance (EPLI)
Impetus for this coverage started with public interest in the allegations made by Anita Hill during the confirmation hearings of Supreme Court Justice Clarence Thomas. Changes in federal and state laws, such as the Americans with Disabilities Act and the Civil Rights Act of 1991, resulted in increased consumer awareness of sexual harassment and discrimination in the workplace. Coverage is available for legal costs to defend claims involving sexual harassment, wrongful termination and discrimination including legal liability for such acts. The coverage is known by various titles. Employment-related practices liability, management risk protection, employers E&O and Americans with Disabilities Act insurance are basically the same coverage. Most policies provide limits ranging from as low as $25,000 per claim up to $1 million. Policies may cover employees as additional insureds.

Employment-Related Practices Liability (ERPL) or (
Impetus for this coverage started with public interest in the allegations made by Anita Hill during the confirmation hearings of Supreme Court Justice Clarence Thomas. Changes in federal and state laws, such as the Americans with Disabilities Act and the Civil Rights Act of 1991, resulted in increased consumer awareness of sexual harassment and discrimination in the workplace. Coverage is available for legal costs to defend claims involving sexual harassment, wrongful termination and discrimination including legal liability for such acts. The coverage is known by various titles. Employment-related practices liability, management risk protection, employers E&O and Americans with Disabilities Act insurance are basically the same coverage. Most policies provide limits ranging from as low as $25,000 per claim up to $1 million. Policies may cover employees as additional insureds.

Engineers Professional Liability Policy
Protects engineers against claims arising out of their professional services caused by error, omission or negligent acts. Most often written as architects and engineers professional liability policy or engineers and architects professional liability policy.

Entertainment Insurance
A generic term used to refer to the category of insurance developed to address the needs and exposures of a wide range of entertainment-theatrical, contests, competitions, special events, etc. This category of insurance may include liability, property, crime, and loss of income losses to cover the range of entertainment interests from promoters, to the theater, stadium or other property owners, to producers, and so forth. Coverage is also available for loss of income which may result from the interruption, cancellation or postponement of the designated type of entertainment, when caused by a specified event.

EPL--Employment-Related Practices Liability (also known as ERPL or EPLI)
Impetus for this coverage started with public interest in the allegations made by Anita Hill during the confirmation hearings of Supreme Court Justice Clarence Thomas. Changes in federal and state laws, such as the Americans with Disabilities Act and the Civil Rights Act of 1991, resulted in increased consumer awareness of sexual harassment and discrimination in the workplace. Coverage is available for legal costs to defend claims involving sexual harassment, wrongful termination and discrimination including legal liability for such acts. The coverage is known by various titles. Employment-related practices liability, management risk protection, employers E&O and Americans with Disabilities Act insurance are basically the same coverage. Most policies provide limits ranging from as low as $25,000 per claim up to $1 million. Policies may cover employees as additional insureds.

EPLI--Employment-Related Practices Liability (also known as ERPL or EPL)
Impetus for this coverage started with public interest in the allegations made by Anita Hill during the confirmation hearings of Supreme Court Justice Clarence Thomas, Changes in federal and state laws, such as the Americans with Disabilities Act and the Civil Rights Act of 1991, and increased consumer awareness of sexual harassment and discrimination in the workplace. Coverage is available for legal costs to defend claims involving sexual harassment, wrongful termination and discrimination including legal liability for such acts. The coverage is known by various titles. Employment-related practices liability, management risk protection, employers E&O and Americans with Disabilities Act insurance are basically the same coverage. Most policies provide limits ranging from as low as $25,000 per claim up to $1 million. Policies may cover employees as additional insureds.

Equipment Floater Insurance
A form of inland marine insurance, often on an "all-risk" basis, covering various kinds of equipment. (See contractors' equipment floater.)

ERPL--Employment-Related Practices Liability (also known as EPL or EPLI)
Impetus for this coverage started with public interest in the confirmation hearings of Supreme Court Justice Clarence Thomas and his alleged relationship with a woman coworker, other changes in federal and state laws, such as the Americans with Disabilities Act and the Civil Rights Act of 1991, and new consumer awareness of the practice of sexual harassment and discrimination in business. Coverage previously has been available for legal costs to defend claims against sexual harassment, wrongful termination and discrimination, but only recently has any policy covered actual legal liability for such acts. The coverage is known by various titles through a few insurers. Employment-related practices liability, management risk protection, employers E&O and Americans with Disabilities Act insurance are basically one and the same coverage. Most policies provide varying limits ranging from as low as $25,000 per claim up to $1 million. Policies may cover employees as additional insureds.

Errors and Omissions Insurance
1) A form of professional liability insurance which provides coverage for mistakes made by a person or persons in a profession not involved with the human body, such as lawyers, architects, engineers, or for mistakes made in a service business, such as insurance, real estate, and others. (See nonrecording chattel mortgage policy.) 2) A form of coverage for financial institutions protecting against loss to lending institutions which fail to effect insurance coverage. (See malpractice and medical malpractice.)

Excess Insurance
An amount of protection which bears all or a portion of a loss after the loss exceeds an agreed amount. This amount may or may not be insured elsewhere by the company issuing the policy. Excess policies are not subject to the basic principle of contribution with non-excess policies, although they may contribute or share the loss with other excess policies.

Excess Liability Insurance
Liability insurance designed to provide an extra layer of coverage above the primary layer. The excess insurance does not respond, however, until the limits of liability in the primary layer have been exhausted. Because of the method of response, it is often much less costly than the primary layer, per $1,000,000 of coverage. The excess layer provides not only higher limits, but catastrophic protection for very large losses.

Excess of Loss Ratio Insurance or Reinsurance
A company wishing to protect itself in the event its net loss ratio for a given year rises above a certain percentage may buy reinsurance which pays in excess of that figure up to a higher agreed percentage, beyond which the company is once more liable. In short, a plan which takes the sting out of an above-average net loss ratio. (See stop loss reinsurance.)

Excess of Loss Reinsurance
A company wishing to protect itself in the event its net loss ratio for a given year rises above a certain percentage may buy reinsurance which pays in excess of that figure up to a higher agreed percentage, beyond which the company is once more liable. In short, a plan which takes the sting out of an above-average net loss ratio. (See stop loss reinsurance.)

Excess Property Insurance
Insurance protection for large property risks that provides a layer of coverage above the primary layer. The primary policy will cover most property losses while the excess layer of coverage does not respond until the primary layer has exhausted all applicable limits. The primary layer acts much the same as a very large deductible.

Extended Coverage Insurance
Protection against loss or damage caused by windstorm, hail, smoke, explosion, riot, civil commotion, vehicles, and aircraft. Written in conjunction with a fire policy either as part of the basic contract or by endorsement.

Extended Health Insurance
Health insurance coverages available for retired persons to cover the surplus after retirement health insurance and Medicare benefits are exhausted.

Extended Term Life Insurance
An option available in some whole life insurance policies, allowing the insured to use the cash value of the policy to purchase additional term life insurance. The insured uses the whole life cash value to pay the premiums of the term coverage until the whole life cash value is exhausted.

Exterminators Liability Insurance
Liability insurance designed specifically to cover the exposures and hazards faced by exterminators of all types of insects, pests, and rodents, and any chemical applications those operations may use.

Extortion Insurance
A type of crime coverage designed to protect any type of operation from loss of money, property, stock, or other tangible assets that are extorted during a threat of harm to persons or property.

Extra Expense Insurance
Reimbursement for additional expenses incurred because of an insured loss. Written either as a separate policy or as an endorsement.

Hail Insurance
Insurance against hail damage to growing crops. Although hail is the basic cause of loss protected against in these policies, cover is often granted for crop damage resulting from additional causes of loss such as fire, windstorm, lightning, drought, frost, excessive heat, snow, sleet, etc.

E-Insurance
An evolving term that typically refers (theoretically) to any form of insurance coverage that is sold, delivered and serviced electronically, specifically via the Internet. Another term is virtual insurance.

Environmental Impairment Liability Insurance
Insurance designed to provide protection for the liability exposures that may result from damage, injury and, in some cases, clean-up costs caused by pollution. This coverage is excluded in the standard CGL, and the attempt has been to make the CGL exclusion as broad or absolute as possible.

Excess and Surplus Insurance
An amount of protection which bears all or a portion of a loss after the loss exceeds an agreed amount. This amount may or may not be insured elsewhere by the company issuing the policy. Excess policies are not subject to the basic principle of contribution with non-excess policies, although they may contribute or share the loss with other excess policies.

Paid-Up Insurance or Paid-Up At Age Life Insurance
A whole life insurance policy giving standard lifetime protection, but where the policy becomes paid in full at a certain age, such as a policy paid in full at age 60. (See limited-payment life insurance.)

Factory Insurance Association
Now called Industrial Risk Insurers, this is a consortium of major stock property and casualty insurers formed to write large, highly protected risks and to provide fire laboratory facilities and engineering services. The organization was formed in 1975 by the merger of the Factory Insurance Association and the Oil Insurance Association. Headquarters: Hartford, CT.

Facultative Reinsurance
Reinsurance effected item by item and accepted or declined by the reinsuring company after scrutiny, as opposed to reinsurance effected by treaty. The word facultative connotes that both the primary insurer and the reinsurer have the faculty or option of accepting or rejecting the individual submission, as distinguished from the preset obligation to cede and accept already agreed upon by the parties in treaty reinsurance.

Family Income Life Insurance
A type of life insurance program with both whole life and term life insurance products. Should the insured die before a specified date in the policy, benefits are paid in the form of monthly income. After that date, a flat amount is paid.

Farmers Comprehensive Personal Liability Insurance
Similar to comprehensive personal liability coverage, but amended to take care of the special accident risks found around the farm. A legal liability or third-party policy, i.e., it protects the farmer against bodily injury or property damage claims from others, including at times claims from farm employees.

FCIA--Foreign Credit Insurance Association
A group of insurance companies cooperating with the Export-Import Bank of Washington (Exim-bank) to provide foreign credit insurance for American exporters, thus assisting United States business to become more competitive in foreign trade. Coverage provides for credit and political risks. Headquarters: New York, NY.

Federal Crime Insurance Program
Administered by the Federal Insurance Administration to provide limited burglary and robbery coverage for property owners who experience difficulty in buying insurance on property located in blighted or deteriorating urban areas.

Federal Employees' Group Life Insurance Policy (FEGLI)
Group life insurance policies offered to federal employees. Premiums are paid by insureds through payroll (or benefits) deductions.

FEGLI--Federal Employees' Group Life Insurance Policy
Group life insurance policies offered to federal employees. Premiums are paid by insureds through payroll (or benefits) deductions.

First Class Mail Insurance
"All-risk" coverage on bonds, stock certificates and other securities shipped first class mail by banks, trust companies, investment corporations, and other firms engaged in security transactions.

First Loss Insurance
An insurance policy which is called upon to pay a loss before others covering the same loss, or a contract written to cover only the insured's expected loss during the policy period with no other insurance in force.

First Surplus (reinsurance) Treaty
As a reinsurance term, first surplus means the amount of liability assumed on a certain risk, which is in addition to the amount which the primary company cares to hold for its net account. A treaty or contract which reinsures this "surplus" on a pro rata basis is called a first surplus treaty. Since there usually is a limit on the amount which may be ceded, there may be second or third surplus treaties to permit the writing of larger direct lines.

Flexible Premium Life Insurance
A variable life insurance where the insured has the flexibility to choose the amount and timing of the premium payments, as well as the ability to change those options after inception.

Flood Insurance
Coverage against damage done by the rising or overflowing of bodies of water.

Flood Insurance Rate Map
A map published by the Federal Insurance Administration to plot the layout of communities in flood prone areas, based upon comprehensive study and used as the actuarial basis for the promulgation of flood rates. Once a community has been charted and the map completed, that community becomes eligible for the National Flood Insurance Program.

Floor Plan Insurance
Coverage acquired by the financier, whether finance company or bank, to protect either its interest alone or its joint interest with the merchant, in which a special form is used. Merchants of high valued articles, such as automobiles and expensive household equipment such as refrigerators, often borrow money from finance companies or banks on the collateral of their stock of specifically identified property "on the floor" for sale. (See single interest cover (or insurance) and credit insurance.)

Following Form Excess Liability Insurance
An excess liability policy which extends an additional limit of insurance above the primary policy and provides exactly the same coverage as the underlying primary liability policy.

Following Form Excess Property Insurance
An excess property policy which extends an additional limit of insurance above the primary policy and provides exactly the same coverage as the underlying primary property policy.

Foreign Credit Insurance Association (FCIA)
A group of insurance companies cooperating with the Export-Import Bank of Washington (Exim-bank) to provide foreign credit insurance for American exporters, thus assisting United States business to become more competitive in foreign trade. Coverage provides for credit and political risks. Headquarters: New York, NY.

Franchise Insurance
A form of mass merchandising of insurance where policies are sold to members of some common group or association individually on the basis of individual rates, but with some discount based on expense savings. Franchise insurance should be contrasted with group or true group, where premiums are determined for the group on the basis of its own expenses and losses and where all or most of the group are insured. (See group merchandising.)

Fraternal Insurance
A form of cooperative life or disability insurance sold by certain fraternal organizations, usually as legal reserve insurers, to their members.

Furriers Customers Insurance
An inland marine form of insurance in which the customer of a furrier who stores fur garments is insured under a policy arranged by the furrier.

Hangarkeepers Legal Liability Insurance
Protection for the aircraft hangarkeeper for losses caused by negligence in storing aircraft as a bailee.

First Party Insurance
Insurance that pays for loss to an insured who is considered the first party to an insurance contract. The second party is the insurance company and other persons claiming injury are called third parties.

FISCAA (Flood Insurance Servicing Companies Association of America, Inc.)
An organization of insurers who provide flood insurance under the National Flood Insurance Program's Write Your Own (WYO) program. Its goal is to educate the public about the protection available from the NFIP. It was established in 1992. Headquarters: Orlando, FL.

Flood Insurance Servicing Companies Association of America, Inc. (FISCAA)
An organization of insurers who provide flood insurance under the National Flood Insurance Program's Write Your Own (WYO) program. Its goal is to educate the public about the protection available from the NFIP. It was established in 1992. Headquarters: Orlando, FL.

Finite Reinsurance
Basically refers to any reinsurance contract that is designed to transfer a limited/specified amount of loss exposure. Such agreements typically use accounting or other financial methods to handle the specific exposure (rather than an insurance risk transfer).

General Partners Liability Coverage
Also known as limited partnership reimbursement coverage, this business liability policy covers a general partner's business management and fiduciary responsibilities to a limited partnership. The situations covered are similar in concept to a director's or officer's actions for a corporation.

Glass Insurance
Coverage against the breakage of glass.

Group Accident and Health Insurance
Group insurance programs designed to offer affordable accident and/or health coverage to a natural group, such as employees of an employer or members of an association and their families. A single contract is provided for the entire group which outlines the standard benefits, terms and provisions that apply to all members of the group. Individual certificates are usually issued to the members to verify that they are covered.

Group Captive Insurance Company
A captive insurance company formed and owned by a group of somehow related companies, either affiliates or in a similar type of business. The sole purpose of the group captive is to provide insurance only to that group.

Group Credit Life Insurance
Life insurance coverage designed to protect lenders should any of their borrowers become disabled or die. The limit of insurance is written on the total amount that the lender has outstanding to borrowers, but the lender will receive only the amount of the balance of the outstanding loan of each borrower who becomes disabled or dies, as the event occurs.

Group Disability Insurance
Group insurance programs designed to offer affordable disability coverage to a natural group, such as employees of an employer or members of an association and their families. A single contract is provided for the entire group which outlines the compensation benefits available should accident or illness occur to a member of the plan. Normally the compensation is a percent of the actual income of the member and is limited in the length of time that a member can collect those benefits. These limitations are designed to encourage recovery and return to work. Individual certificates are usually issued to the members to verify that they are covered.

Group Health Insurance
Group insurance programs designed to offer affordable health coverage to a natural group, such as employees of an employer or members of an association and their families. A single contract is provided for the entire group which outlines the standard benefits, terms and provisions that apply to all members of the group. Individual certificates are usually issued to the members to verify that they are covered.

Group Insurance
1) Insuring a number of persons under a single master contract. The persons have a common sponsor, such as an employer, a union or an association. 2) "True" group insurance precludes individual underwriting by the insurer, requires the employer to insure all employees if the employer pays any portion of the premium, and allows employees the option of participating in any coverage for which the employees must pay.

Group Life Insurance
Group life insurance programs designed to offer affordable coverage to a natural group, such as employees of an employer or members of an association and their families. A single contract is provided for the entire group which outlines the standard benefits, terms and provisions that apply to all members of the group. Normally the life insurance benefits offered are based on the compensation earned by the individual member. Most of the group life insurance programs also offer the members the ability to convert to other permanent, whole or term life products upon termination of employment. Individual certificates are usually issued to the members to verify that they are covered.

Group Property and Liability Insurance
Group insurance programs designed to offer affordable property and liability insurance, most often automobile or homeowners coverages to a natural group such as employees of an employer or members of an association. This is usually an optional benefit that the group member may purchase and is not subsidized by the employer or group. The cost to the member, however, is usually less than what is otherwise available because of lower marketing, sales and administrative expenses saved by the insurer.

General Liability
A form of insurance sold to businesses to indemnify the business for third party liability claims due to negligence. Coverages can include premises and operations liability for onsite and jobsite accidents and products liability claims for products that injure third parties.

Graded Premium Whole Life Insurance
The premiums start out low and then jump to a higher level after a period of time. Used with medical students and others who have high future earnings potential but have limited funds today.

Group Ordinary Life Insurance
A group life insurance plan that includes permanent life insurance.

Group Permanent Life Insurance
Permanent life insurance underwritten on a group basis, i.e., with limited medical questions. Group paid-up insurance is often the vehicle used in pension plans that include permanent life insurance.

Group Universal Life Insurance
A group life insurance plan that includes universal life insurance with all its inherent flexibilities. (See also universal life.).

Health Insurance
A broad term describing protection from loss due to illness or injury, resulting in loss of life, loss of earnings, or expenses incurred. Within the broad area of health insurance, there are several major coverages which focus on more specific needs, for example, accident insurance, disability income insurance, hospitalization insurance, and sickness insurance. (See accident and sickness insurance.)

Hole-in-One Insurance
A specialty insurance designed to provide coverage or indemnification for large prize give-aways, specifically related to golf events and based upon the odds faced by the contestants of shooting a hole-in-one.

Hospital Confinement Insurance
A type of health insurance policy which pays a specified periodic benefit should the insured be confined to a hospital for accident, illness or injury. This benefit is paid regardless of whether or not there is other insurance available and is not reflective of or dependent upon the amount of medical expenses involved. Sometimes called hospital income insurance.

Hospital Expense Insurance
Reimbursement for certain limited expenses incurred while being hospitalized due to injury or illness. Also known as hospital-surgical expense insurance.

Hospital Income Insurance
A type of health insurance policy which pays a specified periodic benefit should the insured be confined to a hospital for accident, illness, or injury. This benefit is paid regardless of whether or not there is other insurance available and is not reflective of or dependent upon the amount of medical expenses involved. Sometimes called hospital confinement insurance.

Hospital Professional Liability Insurance
Protects a hospital against claims for injury resulting from malpractice, professional errors, or a mistake by the hospital staff.

Hospital-Surgical Expense Insurance
Reimbursement for certain limited expenses incurred while being hospitalized due to injury or illness. Also known as hospital expense insurance.

Hospitalization Insurance
Reimbursement for certain expenses incurred while being hospitalized due to injury or illness. (See accident and sickness insurance.)

Host Liquor Liability
A form of liquor liability directed at hosts of business or social functions where liquor or alcohol is served, with or without a charge. The basis for legal liability is a dram shop, liquor control or alcoholic beverage law. The laws vary by state, but most provide that the owner, operator or host serving or selling alcoholic beverages is liable for injury or damage caused by or to an intoxicated person if it can be established that the owner, operator or host caused or contributed to the intoxication of the person through the sale or serving of alcoholic beverages.

Host Liquor Liability Insurance
A form of liquor liability coverage where the basis for legal liability is a dram shop, liquor control, or alcoholic beverage law. The laws vary, but most provide that the owner of an establishment which serves alcoholic beverages is liable for injury or damage caused by an intoxicated person if it can be established that the liquor licensee caused or contributed to the intoxication of the person.

Hotel Safe Deposit Box Liability
A special crime coverage form combining coverage for the bailee's exposure of the insured for physical damage to the property of guests contained in safe deposit boxes or vaults of the insured. Both physical damage and the insured's legal liability are covered.

Hurricane Insurance
A type of property insurance policy specifically designed to cover physical damage as a result of wind from a hurricane. (See beachfront plans.)

Hole-in-One Insurance
Hole-in-one coverage is a form of prize indemnification insurance usually purchased by a sponsor of a local golf tournament who donates a prize, such as a new car, tractor, clothes or other merchandise or cash, to be given to any golfer who scores a hole-in-one on a specified hole on the golf course. The insurance is arranged prior to the event and indemnifies the insured only if the hole-in-one is made and the prize awarded. The policy warrants that certification of the hole-in-one must be made by at least two tournament officials prior to payment of the insured's loss.

Hospital Indemnity Insurance
(See hospital confinement insurance.)

Historical Insurance Audit
A process, similar to an audit, for researching internal and external sources to reconstruct and document an organization’s history of insurance coverage. This is particularly important to assist with liability arising from past years or even decades, such as damage related to environmental liability or asbestos.

IASA--Insurance Accounting and Systems Association
An international organization to promote the study, research and development of modern theory, practice and procedure as applied to insurance accounting and statistics. Headquarters: Durham, NC.

ICPI--Insurance Crime Prevention Institute
Serves casualty insurers for the investigation of fraudulent insurance claims other than for accident and health or workers compensation, and provides a deterrent to such losses. Headquarters: Westport, CT.

IIA--Insurance Institute of America, Inc.
An educational organization which sets standards and gives examinations for diplomas or fellowships in general insurance, loss adjusting, underwriting, management and risk management. Headquarters: Malvern, PA.

IIAA--Independent Insurance Agents of America
Formerly the National Association of Insurance Agents, a large trade association whose purpose is to protect the business interests of its members, who are also members of state associations. Headquarters: Alexandria, VA (Washington, DC in 1988).

IMCA--Insurance Marketing Communications Association
A trade association of those in charge of insurance company advertising, marketing and public relations functions. Formerly known as the Insurance Advertising Conference.

Incidental Medical Malpractice Liability
For those insureds who have a medical professional exposure for operations that are incidental to but not the major function of their business, malpractice insurance is available to protect for injury caused by the rendering or failing to render of those medical services. This coverage was not designed to protect hospitals, clinics or other health care service providers. One common example of an incidental medical exposure that would be covered by this liability protection is a nurse or first-aid provider at a school.

Incidental Medical Malpractice Liability
For those insureds who have a medical professional exposure for operations that are incidental to but not the major function of their business, malpractice insurance is available to protect for injury caused by the rendering or failing to render of those medical services. This coverage was not designed to protect hospitals, clinics or other health care service providers. One common example of an incidental medical exposure that would be covered by this liability protection is a nurse or first-aid provider at a school.

Independent Insurance Agents of America (IIAA)
Formerly the National Association of Insurance Agents, a large trade association whose purpose is to protect the business interests of its members, who are also members of state associations. Headquarters: Alexandria, VA (Washington, DC in 1988).

Indexed Life Insurance
A type of whole life insurance policy whose benefit payout is determined by a set index.

Industrial Health Insurance
Health insurance usually written in small amounts, the premium for which is payable in frequent installments (usually weekly or monthly) and collected by an agent known as a debit agent. The payment frequency and collection facilities were designed decades ago to accommodate workers at industrial factories, who were paid weekly. Because of the expense and time involved, this coverage is rarely used. (See industrial insurance, and industrial life insurance.)

Industrial Insurance
Insurance (usually life or health insurance) written in small amounts, the premium for which is payable in frequent installments (usually weekly or monthly) and collected by an agent known as a debit agent. The payment frequency and collection facilities were designed decades ago to accommodate workers at industrial factories, who were paid weekly. Because of the expense and time involved, this coverage is rarely used. (See industrial health insurance, and industrial life insurance.)

Industrial Life Insurance
Life insurance usually written in small amounts, the premium for which is payable in frequent installments (usually weekly or monthly) and collected by an agent known as a debit agent. The payment frequency and collection facilities were designed decades ago to accommodate workers at industrial factories, who were paid weekly. Because of the expense and time involved, this coverage is rarely used. (See industrial health insurance, and industrial insurance.)

Innkeepers Legal Liability
Hotel and motel operators may be liable for the safekeeping of guests' property; the extent of this liability is established by various state laws. Innkeepers legal liability policy insures against this liability imposed by law, usually with a limit of $1,000 for any one guest, and with an appropriate aggregate limit. Note: This coverage has been replaced by the Commercial Crime Coverage Forms A through Q.

Installation Insurance
Protection for the installer of equipment against loss by specified perils or on an "all-risk" basis to property in the course of installation.

Insurance
The transfer of risk, or chance of loss from one party (the insured) to another party (the insurer), in which the insurer promises, usually specified in a written contract, to pay the insured or others on the insured's behalf, an amount of money, services, or both, for economic losses sustained from an unexpected (accidental) event, during a period of time for which the insured makes a premium payment to the insurer. (See insurer.)

Insurance Accounting and Systems Association (IASA)
An international organization to promote the study, research and development of modern theory, practice and procedure as applied to insurance accounting and statistics. Headquarters: Durham, NC.

Insurance Agency
A business office whose function is the sales of insurance and insurance products. An agency may be owned or run by a general agent, manager, independent agent or company manager. The principal is responsible for the statements and actions of agents performing within the scope of authorization specified in the agency agreement. (See captive agent, general agent and independent agent.)

Insurance Agent
One who has the authority to act for another. In insurance language, an agent is the person who sells insurance by contacting the policyholder. By contract and by law, the agent is endowed with many of the powers of the company itself. There are various different types of agents, based upon the contractual relationship with the insurer they represent. (See independent agent, exclusive agent and broker.)

Insurance Agents and Brokers Errors and Omissions Insurance
Protects an agent or broker against claims for negligent acts, errors or omissions in the conduct of business.

Insurance Broker
A licensed, legal representative of the insured who negotiates with underwriters on behalf of the insured. The broker receives a commission from the insurer (underwriter).

Insurance Commissioner
A state official charged with enforcing the state's laws governing insurance, in some states appointed by the governor, and elected in others. Also referred to in some states as superintendent of insurance or director of insurance.

Insurance Company
An organization chartered by state law to operate as an insurer in some of the principal types of insurance: life, fire, marine, casualty, and surety. Reciprocals and Lloyd's syndicates permitted under many state laws are not companies, nor are they corporations.

Insurance Contract
The written contract or insurance policy between the insured and the insurer detailing the coverage provided, exclusions and limitations, conditions in case of loss, and other details pertinent to the terms of the agreement.

Insurance Crime Prevention Institute (ICPI)
Serves casualty insurers for the investigation of fraudulent insurance claims other than for accident and health or workers compensation, and provides a deterrent to such losses. Headquarters: Westport, CT.

Insurance Department
That department of a state government which has charge of enforcing the laws governing insurance. Usually run by either an elected or appointed official called the superintendent or commissioner of insurance.

Insurance Examiner
A representative or employee of a state insurance department delegated the task of verifying a company's records and procedures to determine that the law has been observed.

Insurance Exchanges
Exchanges established by law in New York, Illinois and Florida (and considered elsewhere) to provide facilities at a fixed location patterned after Lloyd's of London. Through insurance exchanges, buyers can secure insurance from insurers generally in the form of underwriting syndicates, which are members of the exchange. (See New York Insurance Exchange, bourse and Lloyd's of London.)

Insurance Guaranty (Insolvency) Act
Legislation enacted in many states providing for assessments on insurance companies to reimburse policyholders and claimants of insolvent insurers. (See guaranty fund.)

Insurance Hall of Fame
An institution at Ohio State University recognizing individuals who have made outstanding contributions to insurance thought and practice anywhere at any time.

Insurance Information Institute
A public relations organization supported by several hundred property and liability insurance companies. Provides extensive literature to the public and to high schools throughout the country in furthering its purpose of improving public understanding of property and liability insurance. Headquarters: New York, NY.

Insurance Insolvency Act
Legislation enacted in many states providing for assessments on insurance companies to reimburse policyholders and claimants of insolvent insurers. (See guaranty fund.)

Insurance Institute of America, Inc. (IIA)
An educational organization which sets standards and gives examinations for diplomas or fellowships in general insurance, loss adjusting, underwriting, management and risk management. Headquarters: Malvern, PA.

Insurance Institute for Highway Safety
An independent, nonprofit scientific organization established and supported by the insurance companies. Its research identifies, evaluates and develops ways to reduce human and economic damage resulting from the use of motor vehicles. The institute also seeks to make the results of its studies known to the widest possible audience and provides substantial input to federal policymakers. Headquarters: Washington, DC.

Insurance Management
The method used to handle a specific risk's exposure to loss by almost exclusive use of insurance coverages and policies, as well as the control and management of the insurance policies purchased.

Insurance Marketing Communications Association (IMCA)
A trade association of those in charge of insurance company advertising, marketing and public relations functions. Formerly known as the Insurance Advertising Conference.

insurance policy
The written contract or insurance policy between the insured and the insurer detailing the coverage provided, exclusions and limitations, conditions in case of loss, and other details pertinent to the terms of the agreement.

Insurance Regulatory Information System (IRIS)
Formerly known as Early Warning System or Early Warning Tests, financial ratio and performance criteria designed by the National Association of Insurance Commissioners to identify insurance companies which may need close surveillance by state insurance departments.

Insurance Representatives
The collection of professionals that represents the insurance industry in the sales and field positions, such as agency, solicitors, brokers, producers, consultants, etc.

Insurance Retention Group (IRG)
An insurance company organized by a group of businesses or institutions in the same line of business to provide liability insurance for the owners or organizers. As permitted by federal legislation passed in 1986, such a group is eligible to provide insurance for its members in any state after being licensed in any one state. Also known as risk retention group.

Insurance Services Office (ISO)
A corporation which provides a wide variety of services on a national basis. Among its operations are rating, statistical, actuarial, and policy form services for all classes of property and casualty businesses. The corporation also functions as an insurance rating organization and, where applicable, as an advisory organization or as a statistical agent. Headquarters: New York, NY. (See rate card.)

Insurance Society of New York, Inc.
A nonprofit organization founded in 1901 for educational purposes. Its earliest contribution was the formation of its insurance library, today the world's largest collection of insurance literature. In 1917, it started insurance instruction, which in 1947 became The School of Insurance, which was converted in 1962 to the fully accredited degree-granting institution, The College of Insurance.

Insurance Superintendent
A state official charged with enforcing the state's laws governing insurance, in some states appointed by the governor, and elected in others. Also referred to in some states as commissioner of insurance or director of insurance.

Insurance Wraps
A general contractor is typically the party responsible for providing primary insurance coverage on the contract. This coverage must include protection for the work done by and the exposures resulting from the use of subcontractors. This includes coverages such as general liability and workers compensation but may also include business auto exposures. In order to obtain the necessary coverage, insurers may have to develop special programs and manuscript or tailoring endorsements to clarify the extent of the protection and who/what it encompasses. It is sometimes referred to simply as a "wrap."

Interinsurance Exchange
A group of persons who agree to share each other's losses. An unincorporated mutual. Also known as "reciprocal exchange."

International Insurance Coverages/Exposures
Business coverage for companies that conduct business outside the USA. The scope of coverages available may include but are not limited to: premises and product liability, automobile liability, workers compensation and employers liability, property including transit, kidnap and ransom, confiscation and civil war, crime, business interruption, difference in limits and conditions, and endemic disease.

IRG--Insurance Retention Group
An insurance company organized by a group of businesses or institutions in the same line of business to provide liability insurance for the owners or organizers. As permitted by federal legislation passed in 1986, such a group is eligible to provide insurance for its members in any state after being licensed in any one state. Also known as risk retention group.

IRIS--Insurance Regulatory Information System
Formerly known as Early Warning System or Early Warning Tests, financial ratio and performance criteria designed by the National Association of Insurance Commissioners to identify insurance companies which may need close surveillance by state insurance departments.

ISO--Insurance Services Office
A corporation which provides a wide variety of services on a national basis. Among its operations are rating, statistical, actuarial, and policy form services for all classes of property and casualty businesses. The corporation also functions as an insurance rating organization and, where applicable, as an advisory organization or as a statistical agent. Headquarters: New York, NY. (See rate card.)

Increasing Term Insurance
A term insurance policy where the death benefit increases during the term of the policy. The increase may be straight line, on a stair-step basis, or increase according to an index such as the CPI (consumer price index) or other inflationary measure.

Insurance Trust
One of any number of trusts into which life insurance is placed during the lifetime of the insured or into which the proceeds are payable upon death of the insured.

Interest Sensitive Whole Life Insurance
Whole life insurance that pays interest on cash value according to the variable investment results of the insurer. Traditional whole life pays a guaranteed cash value that does not participate in favorable or unfavorable insurer investment results.

Insurance Archaeology
A process, similar to an audit, for researching internal and external sources to reconstruct and document an organization’s history of insurance coverage. This is particularly important to assist with liability arising from past years or even decades, such as damage related to environmental liability or asbestos.

Insurance Call Center
In its simplest form, a physical site used by an organization (insurer) to handle large volumes of incoming and outgoing phone calls involving customer service, marketing, and other business transactions. Such centers are highly dependent upon sophisticated data management and technology. Also called contact centers.

Insurance Contract Parts
Refers to the four general sections of declarations

Insurance Purchasing Group
A coverage alternative to using the traditional insurance market, it refers to a number of parties with similar coverage needs who incorporate into a group to buy liability insurance. Such arrangements are authorized by the Federal Liability Risk Retention Act of 1986.

Insurance to Value
1) In property insurance, a clause requiring the insured to maintain insurance at least equal to stipulated percentage of value in order to collect partial losses in full. If the insurance is less than the minimum required, that proportion of the loss will be paid which the amount of insurance carried bears to the amount which should have been carried. Symbolically: Insurance Carried x Loss = Payment (subject to policy limit) Insurance Required 2) In major medical insurance, the clause that specifies the percentage of a loss which the company will pay and the percentage which the insured will bear (e.g., 80­20, 75­25).

Identity Fraud Expense Insurance
A person who has been victimized by identity theft faces the daunting task of correcting their account information, credit history, and initiating extensive communication with a multitude of lenders, businesses and legal authorities. ID fraud expense insurance helps to cover some of the related expenses, particularly postage and phone charges.

Insurance Forensics
A process, similar to an audit, for researching internal and external sources to reconstruct and document an organization’s history of insurance coverage. This is particularly important to assist with liability arising from past years or even decades, such as damage related to environmental liability or asbestos.

Insurance Scoring
Refers to assigning a numerical score to a number of attributes in an individual's financial history in order to evaluate his or her desirability as a customer or loan prospect. Due to a discovery of a correlation between credit scores and loss probability, credit scores have been modified for use as an underwriting tool by insurers.

Intercompany Reinsurance
A reinsurance arrangement between two or more companies that are affiliates of the same major insurance company group. It is a strategy for spreading a company's total risk more evenly.

Insurance Data Management Association
The Insurance Data Management Association is an organization dedicated to encouraging professionalism in the insurance-related, data management area. The association creates and maintains training material and courses and also tests data management competency through its own certification program. Headquarters: Jersey City, NJ.

Insurance Fraud
Typically involves illegal attempts to secure insurance benefits by submitting false claims, selling illegal or phony coverage, or stealing insurance premiums.

Insurance Training Professional
A designation created by the Society of Insurance Trainers & Educators (SITE) to acknowledge excellence in professional trainers. Headquarters: San Francisco, CA

Jewelers Block Insurance
Broad policies insuring jewelers against all loss to their stock in trade. Generally considered to be a type of inland marine insurance.

Joint Life Insurance
A type of life insurance policy covering more than one insured. The death benefit is paid when either one of the insureds dies. This is a more costly type of life insurance because payments are paid as soon as any one of the insureds dies, increasing the chances for an early payout of the benefits.

Joint Life and Survivor Insurance
A type of life insurance coverage for more than one person. Benefits are not paid until the last of the covered insureds has died. Lower premiums exist on this policy than on individual life policies because of the potential for a much longer period of time that should normally exist before the policy is called upon to make benefits (all insureds must be deceased).

Joint and Several Liability
This type of liability occurs when more than one party is involved in a contract and where both joint liability (that of all the parties to the contract) and several liability (that of each individual party to the contract) promise the action in the contract. If the terms of the contract are not fulfilled, the injured party has the ability to seek a legal remedy from all the parties involved (joint) or each individual party(several).

Juvenile Insurance
Life insurance policies written for children under 16 years of age.

Joint Credit Life Insurance
Used in credit life insurance to cover more than one person, i.e., husband and wife as cosigners. Will pay off the remainder of the loan (the benefit) to the lender upon the death of either or any cosigner to the loan.

Joint Life Insurance
Covers two lives and pays on the death of the first.

Social Insurance
Insurance provided by government.

Key Employee Insurance
Insurance an employer buys on a key person within the organization to protect that employer from the financial impact that could result should that employee become ill, disabled, or die. This insurance may be life, health, or disability. Normally, the employee covered has special skills, training, management, or significant attributes that would cause the organization loss of income should that employee become unavailable and a replacement need to be hired or trained.

Kidnap/Ransom Insurance
Originated as a policy for financial institutions, primarily banks, and tailored to meet the standard kidnap procedure, which is forcing the bank to withdraw the ransom money from its vaults and deliver it to a designated place before release of the banker or family. The recent rash of kidnappings on an international scale involving a variety of corporations has created a heavy demand for a broadened coverage. At this time there is a limited market, a disinclination to write in certain countries, and no standardization in rates. The insurance covers named employees for individual or aggregate amounts, with deductibles requiring the insured to participate in about 10% of any loss. Not an easy class to underwrite. Personal accident coverage for kidnap victims is sometimes available.

Landlords Protective Liability
If an owner of a property leases the entire premises to others who assume full control, the chance of being held liable for accidents occurring on the premises is diminished. The owner can insure the liability as "landlords protective liability," at lesser rates than for the normal owner's, landlord's, and tenant's form of policy. This type of policy is rarely requested or used since the advent of the commercial general liability and the use of additional insured endorsements.

Lawyers Professional Liability Insurance
Protects an attorney or law firm against claims for negligent acts, errors or omissions in the performance of professional legal services.

Leasehold Insurance
Protection against the lessee's (tenant's) loss of value when a lease is canceled because a fire or other peril renders the property unusable, the value being the excess of the rental value of the property over the rental payable in the lease. The insurance against the loss of such value is "leasehold" insurance against whatever perils may be written. More popular with long leases in periods of rising rental values.

Legal Expense Insurance
Insurance covering legal costs, written generally on a group basis. Includes the indemnification through providing agreed legal services, as well as the payment of money to compensate the insured for costs. Also referred to as prepaid legal insurance.

Legal Liability
Liability imposed by law, as opposed to liability arising from an agreement or contract.

Level Premium Life Insurance
A life insurance policy where the premium remains the same throughout the term of the policy. Although the premium is unchanged, it is proportionately higher than actually needed by the insurer in the early years to offset the fact that the premium becomes lower than needed by the insurer in the later years.

Level Term Life Insurance
A term life insurance policy, whose face value does not change throughout the term of the contract. (See term insurance.)

Liability
1) An obligation imposed by law or equity. 2) Money owed or expected to be owed. In an insurance company financial statement, the two columns it contains are its "assets" (or the amounts it owns) and the "liabilities" (or the amount it owes or expects to owe). Liabilities generally are defined by state statute or insurance department regulation for use in the annual statement of an insurer. The term is also defined for special purposes by other regulatory officials, such as the Securities and Exchange Commission.

Liability Insurance
Protection which pays sums that an insured is legally obligated to pay, or that the insurer has agreed to pay, as damages to others as a result of the insured's negligence. Usually provides coverage for bodily injury or damage to property of others. (See bodily injury liability insurance and property damage liability insurance.)

Libel Insurance
Insurance against claims arising from purported libel, slander, defamation, etc. Bought principally by those engaged in the publishing or advertising business and radio and television. Now commonly included in the personal injury endorsement of commercial liability policies.

Life Expectancy Term Insurance
Term insurance developed and offered to an insured for the average number of years an individual of a given age is expected to live as based on mortality tables.

Life Insurance
The promise to pay at the death of the insured, or at another determined time if earlier, an amount larger than the accumulated value of the consideration paid for the promise.

Life Insurance Trust
A life insurance policy that has a trust named as the beneficiary instead of an individual. The trust then makes payouts and disbursements of funds based upon the terms and conditions that the trust was formed under.

Limit or Limit of Liability
According to the terms of a given policy, the most an insurer will pay for any one loss. (See aggregate limit.)

Limited Liability Corporation
A hybrid between a partnership and a corporation. The operation of the limited liability company is handled by managers on behalf of members who, on one hand, have the protection of a corporation in that personal assets are protected and only company assets can be assessed. On the other hand, the income and profit that is earned by the limited liability company is not taxed against the company but is the obligation of the members as individuals.

Limited Life Insurance Policy
Life insurance policies that provide benefits only if the insured dies of a specified type of illness, injury or disease, such as cancer.

Limited-Payment Life Insurance
A type of life insurance policy for which the insured pays a premium during a limited number of years or for a specified period of time, after which the policy is paid in full. (See paid-up at age life insurance.)

Limited Risk Health Insurance Policy
A limited type of health insurance that usually has very low limits and limited benefits; it is often a Medicare supplement.

Liquor Liability Insurance
Coverage where the basis for legal liability is a dram shop, liquor control, or alcoholic beverage law. The laws vary, but most provide that the owner of an establishment which serves alcoholic beverages is liable for injury or damage caused by an intoxicated person if it can be established that the liquor licensee caused or contributed to the intoxication of the person. (See liquor liability laws.)

Livestock Insurance
Covers horses and other cattle against injury and death. Much of it is written by specialty companies which write only this one class.

Livestock Mortality Insurance
Policies designed for farm or ranch operations to protect the insured against losses resulting from the death of livestock from specified causes of loss. Normally these causes of loss are fire, lightning, accident, acts of God, acts of persons other than the owner or employees, and necessary destruction for humane purposes. (See animal mortality insurance, and poultry insurance (chickens.)

Long-Tail Liability
Covered liability occurrences may take many years to fully develop into claims, be investigated, and settled. This development process is called long-tail. As a result, liability rates are not as responsive to losses, nor are they as credible as other lines of insurance.

Long-Term Disability Insurance
A disability insurance designed to offer income payments for long-term injuries, illnesses or disabilities. Long-term is often considered over 90 days.

Loss of Use Insurance
Insurance which compensates the policyholder for the inability to use property destroyed or damaged by an insured peril. For example, if a car is stolen, loss of use insurance will pay or contribute to the cost of hiring a substitute car.

Long Term Care Insurance
Sold either on a group or individual basis. Pays for nursing home or home health care costs including room, board and medical expenses.

LLC--Limited Liability Corporation
A hybrid between a partnership and a corporation. The operation of the limited liability company is handled by managers on behalf of members who, on one hand have the protection of a corporation in that personal assets are protected and only company assets can be assessed. On the other hand, the income and profit that is earned by the limited liability company is not taxed against the company but is the obligation of the members as individuals.

Latin American Association of Insurance Agents
An association formed as an advocate of its membership's rights. Its focus is on active participation in the communities served by its members. It promotes consumer education, network opportunities, and active involvement in community service and politics. Headquarters: Miami, FL.

Machinery Breakdown Insurance
Protection against loss from disruption of boilers and machinery by an insured cause of loss, consisting of loss to the boiler and machinery itself, damage to other property, business interruption losses, or all three. Also known as breakdown insurance.

MAIF--Maryland Automobile Insurance Fund
In the State of Maryland, it is a state agency created to provide automobile liability insurance for those who have been rejected by at least two private insurance carriers.

Mail-Order Insurance
Purchasing insurance in response to solicitation by mail from insurers, a practice used by some insurers in marketing life, health and automobile insurance.

Major Hospitalization Insurance
A health insurance coverage for injuries, sickness, accidents or illnesses that would otherwise result in major or catastrophic hospital costs for the insured. Deductibles for this insurance are usually higher than for other health insurance policies.

Major Medical Insurance
Slang for specializing in certain types of insurance that are expected to produce unstable losses, such as airline insurance or medical malpractice insurance.

Manufacturers and Contractors Lliability Insurance (M&C)
Liability insurance arising from business operations, including ownership and maintenance of premises. Applicable primarily to persons or corporations engaged in manufacturing, construction and installation work. Policies always exclude automobile liability. This coverage is now included in the simplified CGL.

Manufacturers Penalty Insurance
Acting much like a surety bond to cover supply contracts, this commercial insurance is designed specifically to cover the insured's inability to supply or manufacture a given product that the insured has contractually agreed to deliver, due to a covered cause of loss.

Margin Account Insurance
A form of credit life coverage, usually written on a group basis, to protect both stock broker and stock purchaser against loss from the death of the purchaser while moneys are owed for stock acquired on margin (or with partial payment).

Marine Insurance
One of major divisions of insurance (life, health, property, marine, casualty, surety), primarily written for property in transit. If by sea, "ocean" marine or "wet" marine; otherwise, "inland" marine.

Maryland Automobile Insurance Fund--MAIF
In the State of Maryland, it is a state agency created to provide automobile liability insurance for those who have been rejected by at least two private insurance carriers.

M&C--Manufacturers and Contractors Liability Insurance
Liability insurance arising from business operations, including ownership and maintenance of premises. Applicable primarily to persons or corporations engaged in manufacturing, construction and installation work. Policies always exclude automobile liability. This coverage is now included in the Simplified CGL.

Medical Expense Insurance
Insurance providing for payment of medical, surgical, and hospital expenses.

Medical Payments Insurance
Protection to pay the cost of medical care to an injured party regardless of whether the policyholder is liable. Written in conjunction with general and personal liability policies. A similar coverage, automobile medical payments insurance, is available in automobile liability policies.

Messenger and Interior Robbery Insurance
Insures the owner of money, securities and other property against loss by robbery inside the premises and from a messenger outside the premises. Often called inside and outside holdup. This policy has been replaced with the Simplified Commercial Crime Coverage Forms A through R.

Mobile Home Insurance
A special policy has been designed to meet the needs of mobile home owners or occupants, covering physical damage to the home, contents and personal liability while the home is used as a permanent residence.

Modified Life Insurance
A life insurance program giving standard coverages, where the premiums for the initial three to five years are lower than the average needed. They are then raised after that time to levels above the needed average.

Money Orders and Counterfeit Paper Insurance
A type of commercial crime insurance providing coverage for the acceptance by the insured of counterfeit money orders or paper currency. The current commercial crime coverage designation is Crime Coverage Form R.

Monthly Debit Ordinary Life Insurance
Ordinary life insurance policies with the premiums collected monthly.

Mortgage Insurance
A life, credit life, or disability insurance policy designed to pay off the balance due or make the monthly payments on a mortgage if the insured should be injured, become ill, or die.

Motorcycle and Motor Scooter Insurance
Physical damage and/or liability insurance specifically to cover the exposures of motorcycles, motor scooters and motor bikes.

Multiline Insurance
A package of coverages within one policy that provides for more than one line of insurance such as property and liability. Not the same as multiperil which is a contract that insures more than one peril or cause of loss within the policy. For example, an "all-risk" property policy is multiperil.

Multiperil Insurance
A contract that insures more than one peril or cause of loss within the policy. For example, an "all-risk" property policy is multiperil. Not the same as multiline, which is coverage for more than one line of insurance, such as property and liability.

Multiple Protection Life Insurance
A combination term and whole life insurance policy designed to pay one, usually higher, limit for the first stage of the policy and which then converts to a lower whole life policy after a specified time period for the remainder of the policy.

Municipal Insurance
Commercial insurance programs designed specifically to cover cities, towns, states, or other types of municipalities.

Mutual Atomic Energy Reinsurance Pool
A pool formed by mutual casualty and fire companies to provide bodily injury and property damage insurance for private nuclear reactor installations. Similar to the stock company syndicate, American Nuclear Insurers.

Mutual Fund Insurance
A specialty insurance designed for financial investments, whereby coverage is guaranteed for the repayment of the principal amount that was invested in the fund.

Mutual Insurance
Protection written by an incorporated insurer having no capital stock and directed by policyholders who are its owners. Mutual insurers are required by law to maintain surplus funds as an operating cushion for solvency. Such surplus funds parallel the capital and surplus funds required by capital stock insurers as margins for solvency. (See capital stock insurance, and stock insurance company.)

Mutual Insurance Companies
A type of insurance company that is owned by its insureds or policyholders instead of stockholders. A board of directors or trustees are elected by the insured and policyholders to run the business operations. Mutual insurers are bound by the same state regulations regarding the maintenance of funds and reserves as a stock insurer, although the names of the required types of funds may be slightly different. The same types of solvency requirements exist. (See capital stock insurance.)

Modified No-Fault Insurance
In reality, all no-fault programs are modifications. Such programs use either a verbal (description of sustained injuries) or a monetary threshold. All accidents falling within the described type of loss or below a certain value are paid by each person's own insurer. A driver may sue other parties for damages arising from all other claims.

Media Professional Liability
A form of errors and omissions coverage that protects operations involved in communications against allegations of third parties that the operations media activities caused them harm. Allegations generally involve communication hazards such as libel, slander, defamation, disparagement, invasion of privacy, product disparagement, etc.

NAIA--National Association of Insurance Agents
A large trade association whose purpose is to protect the business interests of its members, who are also members of state associations. Headquarters: Washington, DC.

NAIB--National Association of Insurance Brokers, Inc.
An organization which represents brokers and presents their views before company bureaus, boards, and government agencies, proposes studies and current state and national legislation, supports the interests of brokers and the insurance-buying public, and informs the public of functions and responsibilities of the insurance broker. Headquarters: Washington, DC.

NAIC--National Association of Insurance Commissioners
A voluntary organization of state insurance commissioners, superintendents and directors. NAIC focus upon research studies that often lead to model bills that are recommended to states as uniform laws and regulations. Also provided are valuations of securities held by insurance companies. Annual statements are required by the NAIC from all licensed insurance companies.

NAIC Insurance Regulatory Information System (IRIS)
Formerly known as Early Warning System or Early Warning Tests, financial ratio and performance criteria designed by the National Association of Insurance Commissioners to identify insurance companies which may need close surveillance by state insurance departments.

NAIW--National Association of Insurance Women
An organization designed to broaden its members' knowledge of insurance, promote public safety, and conduct public service programs. Headquarters: Tulsa, OK.

NAMIC--National Association of Mutual Insurance Companies
A trade association representing more than 1,000 member property-liability insurers (75% of which are farm, county or township mutuals, and 25% of which are advanced premium mutuals) in gathering and analyzing information on all matters relating to insurance and the prevention of losses. Headquarters: Indianapolis, IN.

National Association of Insurance Agents (NAIA)
A large trade association whose purpose is to protect the business interests of its members, who are also members of state associations. Headquarters: Washington, DC.

National Association of Insurance Brokers, Inc. (NAIB)
An organization which represents brokers and presents their views before company bureaus, boards, and government agencies, proposes studies and current state and national legislation, supports the interests of brokers and the insurance-buying public, and informs the public of functions and responsibilities of the insurance broker. Headquarters: Washington, DC.

National Association of Insurance Commissioners (NAIC)
A voluntary organization of state insurance commissioners, superintendents and directors. NAIC focus upon research studies that often lead to model bills that are recommended to states as uniform laws and regulations. Also provided are valuations of securities held by insurance companies. Annual statements are required by the NAIC from all licensed insurance companies.

National Association of Insurance Women (NAIW)
An organization designed to broaden its members' knowledge of insurance, promote public safety, and conduct public service programs. Headquarters: Tulsa, OK.

National Association of Mutual Insurance
Now the Professional Insurance Agents (PIA), formerly the National Association of Mutual Insurance Agents, a trade association whose purpose is to protect the business interests of its members, who also are members of state associations. Headquarters: Alexandria, VA.

National Association of Mutual Insurance Companies (NAMIC)
A trade association representing more than 1,000 member property-liability insurers (75% of which are farm, county or township mutuals, and 25% of which are advanced premium mutuals) in gathering and analyzing information on all matters relating to insurance and the prevention of losses. Headquarters: Indianapolis, IN.

National Council on Compensation Insurance
An association of insurance companies providing workers compensation insurance. Its main functions are rate making, collecting related statistics, and developing rating plans relative to compensation insurance. Operates through administrative bureaus located in many states. Headquarters: New York, NY.

National Flood Insurance Act of 1968
An act establishing a basis for flood insurance as a joint venture between the private insurance industry and the federal government. The federal government has since taken over the entire program.

National Health Insurance
A national or federal government sponsored and administered health insurance program, not found in the United States, but used in various other countries such as Canada and Great Britain. In this type of program, the health insurance needs of all citizens are covered, with the premiums paid or financed by taxes.

National Workers Compensation Reinsurance Pool
A reinsurance organization in which hazardous workers compensation risks assigned to insurers under various insurance plans are reinsured into a pool in which all companies participate proportionately, distributing losses so that undue loss to any one company may be avoided. At this time, the pool operates in 30 states. Headquarters: New York, NY.

Negative Film Insurance
Pays a producer of commercial films the cost of re-shooting should the film suffer damage in the course of production.

New York Insurance Exchange
A property-liability underwriting exchange formed in 1980, patterned after the syndicate type of operation of Lloyd's of London. The chief differences between the Exchange and Lloyd's are that the New York Exchange permits corporate as well as individual members, and their liability is limited to the amount of funds invested. (See insurance exchanges.)

No-Fault Automobile Insurance
Coverage designed to compensate victims of automobile accidents via their own insurance carriers, regardless of fault and without the necessity of proving negligence on anyone's part. No-fault laws passed by different states vary greatly in their scope and application. Most provide that a victim's own insurance will allow a victim to sue in tort, once expenses or injuries have passed a stipulated threshold (monetary or otherwise). (See Keeton-O'Connell plan and personal injury protection (PIP).)

Nonadmitted Insurance
Protection written by an insurer on a risk located in a state in which the insurer is not licensed. Such an insurer is referred to as a nonadmitted insurer.

Noninsurance
The handling of an exposure and its resultant losses through means other than insurance. Alternative methods are self-retention, alternative financing, loss prevention, elimination of the exposure or in some cases if there is no method at all, it remains uninsured. Normally, when alternative methods are used, losses are handled as business expenses.

Nonowned Automobile Liability Insurance
Coverage for the policyholder against liability incurred while driving an automobile not owned or hired by the policyholder or resulting from the use of someone else's automobile on the insured's behalf, such as an employee using a personal car for the employer's business purposes. This coverage is automatically included in personal and most commercial automobile policies.

Nonparticipating Insurance
Policies which do not share in any policyholder dividends declared by the company. (See participating insurance.)

Nonstandard Insurance
Insurance coverages that are outside those considered "standard" with respect to the coverages, forms and endorsements provided. Standard insurance is those policies and forms that share common policy language and verbiage as well as same or similar clauses and provisions. Standard also refers to business types and the exposures that the business represents. Businesses that pose only commonly expected exposures are considered standard while businesses that pose unique, unusually or very high exposures are considered nonstandard and thus require nonstandard insurance.

Nuclear Energy Insurance Association
A pool or association of insurers who have combined to provide nuclear energy liability insurance. (See nuclear energy liability insurance.)

Nuclear Energy Liability Insurance
Specialty insurance coverage designed to offer liability protection for third-party bodily injury and property damage losses that may occur as a result of the insured's ownership, use or transport of nuclear material. This type of loss is normally excluded by most standard liability policies, thus the need for specialty protection. (See nuclear energy insurance association.)

Nursing Home Professional Liability Policy
Protects a nursing home against claims for injury resulting from negligence of the nursing home staff.

NAAIA (National African American Insurance Association)
An association of minority insurance professionals established to promote professional development, encourage entrepreneurship and create a greater level of appreciation within the insurance industry for the expertise and contributions made by its minority participants. Headquarters: Cincinnati, OH.

National African American Insurance Association (NAAIA)
An association of minority insurance professionals established to promote professional development, encourage entrepreneurship and create a greater level of appreciation within the insurance industry for the expertise and contributions made by its minority participants. Headquarters: Cincinnati, OH.

National Crop Insurance Services
The NCIS is an advisory organization that was formed in 1915. It provides a variety of services to crop insurers and their industry including forms development, loss statistics, regulatory and compliance, underwriting rules, product development, training, and lobbying. Headquarters: Overland Park, KS.

NCCI (National Council on Compensation Insurance)
An association of insurance companies providing workers compensation insurance. Its main functions are rate making, collecting related statistics, and developing rating plans relative to compensation insurance. Operates through administrative bureaus located in many states. Headquarters: New York, NY.

NCIS (National Crop Insurance Services)
The NCIS is an advisory organization that was formed in 1915. It provides a variety of services to crop insurers and their industry including forms development, loss statistics, regulatory and compliance, underwriting rules, product development, training, and lobbying. Headquarters: Overland Park, KS.

Nursing Liability
A policy that protects against being held legally liable for loss or damage that arises out of the insured's nursing duties. A form of professional liability.

Nonproportional Reinsurance
Reinsurance in which the reinsurer's response to a loss depends on the size of the loss rather than to its proportion to the underlying policy limits.

National Alliance for Insurance Education and Research
An organization founded in 1969 for the purpose of offering practical continuing education to insurance and risk management personnel. This group developed the CIC (Certified Insurance Counselor) Designation. Headquarters: Austin, TX.

National Conference of Insurance Guaranty Funds
This nonprofit association was established in December 1989. Its purpose is to assist the nationwide network of property and casualty guaranty funds. Specifically it shares information on insurer insolvencies that affect more than one state. Headquarters: Indianapolis, IN.

Ocean Cargo Insurance
A type of marine insurance that provides property protection for cargo that is being shipped by sea or over water.

Ocean Marine Insurance
The protection of ships, their cargoes, and the freight, including protection and indemnity insurance to cover shipowners' liabilities for loss of life to any person, illness or injury to crew, damage to cargoes carried, and damages to fixed or floating objects.

OCP--Owners and Contractors Protective Liability Insurance
A policy which provides liability coverage for the insured for the negligent acts of contractors and subcontractors hired by the insured. May also cover for their own negligent supervision of the work performed.

Officers and Directors Liability Insurance
Protects officers and directors of a corporation against damages from claims resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation (and even the officers and directors in some cases) for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors. These policies always require the insured to retain part of the risk uninsured.

OLT--Owners, Landlords and Tenants Liability Insurance
Insurance of the liability arising from the ownership, occupancy, operation, or maintenance of premises.

Operations Liability
The liability exposure that develops from the normal ownership, maintenance, and use of a premises and from the conduct of the risk's business operations, not including products or completed operations liability, which is treated separately.

Optional Life Insurance Settlement Modes
A life insurance concept applying to those policies that offer the insured or beneficiary a selection of the ways or methods to be used for the payment of benefits. Each of the selections available is an option or mode.

Ordinary Life Insurance
Standard or ordinary whole life insurance coverages that cover the lifetime of the insured, usually available in multiples of $1,000. Premiums are collected annually or in some type of annual payment plan and continue for a significant period of time until the policy is paid in full, normally at an age close to retirement.

Other Insurance Clause
Language in many policies which states the method for apportioning the loss between two or more policies covering the same property at the time of loss.

Outage Insurance
A contingent property or time element coverage to protect an insured from loss of income that occurs as a result of damage to machinery that is not operable, due to direct damage cause of loss. Currently, it may be covered by a boiler and machinery or machinery and equipment policy.

Outside Holdup Insurance
Messenger robbery insurance. This policy has been replaced with the Simplified Commercial Crime Coverage Forms A through R.

Overhead Expense Insurance
A type of disability insurance providing coverage for the cost of overhead expense items pertinent to continuing business operations, in the event the insured should become ill, injured or disabled. Benefit limits for this coverage are not set, but the insurance will pay on an expenses-incurred basis.

Overinsurance
Coverage in amounts greater than the value of the property insured or the amount of loss sustainable by the insured; for example, several policies of hospitalization insurance for a total amount in excess of daily room charges.

Overlapping Insurance
When two or more different kinds of policies cover the same loss, the insurance is said to be "over-lapping," as opposed to two or more policies of the same kind, which is "contributing" insurance. Contributing insurance is illustrated by two fire insurance policies covering the same loss. However, if an inland marine policy and a fire policy cover the same loss, they are overlapping insurance. (See contribution clause, and guiding principles.)

Owners and Contractors Protective Liability Insurance (OCP)
A policy which provides liability coverage for the insured for the negligent acts of contractors and subcontractors hired by the insured. May also cover for their own negligent supervision of the work performed.

Owners, Landlords and Tenants Liability Insurance (OL&T)
Insurance of the liability arising from the ownership, occupancy, operation, or maintenance of premises.

Old Age, Survivors, Disability and Health Insurance Act (OASDHI)
The social security act.

OCIP (Owner-Controlled Insurance Program)
An insurance program that is designed, implemented and administered by an organization for its own use, independent of the involvement of a contract with an insurance company. OCIPs generally involve a single coverage, such as workers compensation or product liability. Its purpose is to protect the organization from an acute loss exposure while saving money typically needed for insurance premiums.

Owner-Controlled Insurance Program (OCIP)
An insurance program that is designed, implemented and administered by an organization for its own use, independent of the involvement of a contract with an insurance company. OCIPs generally involve a single coverage such as workers compensation or product liability. Its purpose is to protect the organization from an acute loss exposure while saving money typically needed for insurance premiums.

Paramedics Professional Liability
Specially designed professional liability coverage for the exposures experienced by paramedics who have quasi-medical malpractice loss potential.

Parcel Post Insurance
An inland marine form that insures against the loss of merchandise in transit by government parcel post.

Partial Disability Insurance
Insurance coverage for insureds who may suffer a partial disability. Partial disability is defined as the inability caused by a covered accident, injury, or illness to perform one or more of the functions of one's regular job but which does not, however, limit the person's ability to perform other forms of employment. Often this insurance is called on to provide rehabilitation benefits and job retraining.

Participating Insurance
A designated class of insurance which shares in the dividends declared by the company to policyholders. While mutual insurers primarily issue participating policies, and stock insurers usually issue nonparticipating policies, either type of insurer may seek authorization from its domiciliary state insurance department to issue the other type of policy. (See dividend, and nonparticipating insurance.)

Partnership Insurance
Life and health insurance coverages available for partnerships. These policies are used when the partnership needs protection for the continuation of the operation should one of the partners die or become disabled.

Patent Insurance
1) Insurance coverage for losses the insured may suffer as a result of another party's infringing upon the insured's patent rights. 2) Insurance coverage for allegations against the insured of infringements upon the rights of a patent holder.

Paymaster Robbery Insurance
Insurance of payroll moneys against loss by robbery inside or outside the insured's premises. The broad form policy covers payroll funds against "all risks" of loss or damage. This policy has been replaced with the Simplified Commercial Crime Coverage Forms A through R.

Pension Trust Liability Insurance
Protection for those who administer pension and welfare funds, profit-sharing and other employee benefit programs against loss for errors and omissions by the administrator. The need for this coverage was created by the Employee Retirement Income Security Act (ERISA) of 1974.

Per Diem Business Interruption Insurance
Coverage which provides that the amount recoverable is limited to a fixed amount per day or part thereof in which the manufacture of goods is prevented by an insured loss. This coverage has now been replaced by the business income coverage form.

Perpetual Insurance
A form of insurance, principally property or inland marine, written without an expiration date, which originated in Philadelphia and is largely confined to that city and its surroundings. The policyholder makes a deposit with the insurance company, and the interest earnings from the funds collected pay the losses suffered.

Personal Accident Insurance
Protection of an individual against loss caused by an accident.

Personal Theft Insurance
Coverage of personal property and household goods against loss by theft in and out of residential premises. Issued in the ordinary form and in a broad form, the latter including mysterious disappearance and certain more liberal provisions.

Pet Insurance
Life and health insurance for animals, pets, or livestock.

Pharmacists Professional Liability Insurance
Protects pharmacists and their professional staff against claims for personal injury arising from malpractice, error or mistakes in the performance of their professional services.

Physicians and Surgeons Professional Liability Insurance
Protects physicians and surgeons against claims for personal injury arising from malpractice, errors or mistakes in rendering professional services. Presently, a most expensive coverage due to high jury awards against the medical profession.

PIA--Professional Insurance Agents
Formerly National Association of Mutual Insurance Agents, a trade association whose purpose is to protect the business interests of its members, who also are members of state associations. Headquarters: Alexandria, VA.

P & I Insurance
Protection and indemnity insurance for shipowners, contractors, and charterers against liabilities arising out of the operation of the vessel for loss of life to any person, illness or injury to passengers and crew, damage to cargo while loading, carrying or unloading cargo, damage to piers and docks, and removal of wreckage as required by law.

Plate Glass Insurance
Coverage against the breakage of glass.

Platform Insurance
A special type of ocean marine insurance designed to cover off-shore oil or gas platforms and drilling barges.

Political Risk Insurance
A highly specialized property coverage for risks with foreign or international exposures that provides protection against loss or damage to the covered property as a result of such acts as nationalization, expropriation, deprivation, confiscation and, at times, war and terrorism.

Pollution Insurance
Insurance designed to provide protection for the liability exposures that may result from damage, injury and, in some cases, clean-up costs caused by pollution. This coverage is excluded in the standard CGL, and the attempt has been to make the CGL exclusion as broad or absolute as possible.

Port Risk Insurance
An ocean marine insurance designed to protect a vessel that is portside for a lengthy period of time. Coverage terminates as soon as the vessel leaves port.

Poultry Insurance (Chickens)
A broad, often "all-risk" version of animal mortality insurance designed specifically to protect poultry farmers and other residual industries that have vested interest in poultry operation, such as food processors and feed. (See animal insurance, and livestock mortality insurance.)

Power Interruption Insurance
Property and time element endorsements designed to cover the insured for losses that result from the interruption of services by an insured cause of loss. The current endorsements allow the insured to select coverage for off-premises services, whether supplied by a private or public utility. Protection may be purchased for the following options: water suppliers, communication suppliers, or power supplies.

Power Plant Insurance
Formerly used as a substitute title for boiler and machinery insurance.

Premises Liability Insurance
Insurance protection for the liability exposure that develops from the normal ownership, maintenance, and use of a premises, and from the conduct of the risk's business operations, not including products or completed operations liability which is treated separately.

Prepaid Legal Expense Insurance
Insurance covering legal costs, written generally on a group basis. Includes the indemnification through providing agreed legal services, as well as the payment of money to compensate the insured for costs. Also referred to as prepaid legal insurance.

Primary Insurance
The insurance policy providing the first layer of coverage that will respond first to any loss exceeding the deductible.

Principals Protective Liability Insurance
Insurance against claims which arise out of some secondary cause, such as the negligent acts of an independent contractor engaged by an organization or principal contractor, or an employer for the act of an employee.

Prize Indemnification Insurance
A specialty insurance designed to provide coverage or indemnification for large prize giveaways, based on the odds faced by the insured.

Product-Completed Operations Insurance
Coverage designed to protect against the liability for injury, loss, or damage that a merchant or a manufacturer may incur as the result of some defect in the product sold or manufactured.

Products Liability
The liability that a merchant or a manufacturer may incur as the result of some defect in the product sold or manufactured.

Product Recall Insurance
Pays the expense associated with government-dictated recall of a product suspected of being defective and dangerous to consumers. Pharmaceutical, automobile and aircraft manufacturers are types of risks that often are affected. This expense is not covered by the standard general liability policy.

Product Tampering Insurance
Specialty coverage designed to protect a product seller or manufacturer to cover the cost of recalling items that may have been tampered with, as well as loss of income, and related expenses. One condition often found in this type of policy is that an actual occurrence of tampering or a valid threat must occur before coverage would be available.

Product Warranty Inefficacy Insurance
A highly specialized performance surety or guarantee insurance designed originally for investors or manufacturers of alternative energy sources. The coverage provides financial protection should a system not perform as engineered or designed. This type of insurance encourages investment and development not only of alternative energy sources, but also of other types of manufactured products.

Professional Insurance Agents (PIA)
Formerly National Association of Mutual Insurance Agents, a trade association whose purpose is to protect the business interests of its members, who also are members of state associations. Headquarters: Alexandria, VA.

Profits Insurance
Coverage for the loss of profit that the policyholder could have earned if the merchandise destroyed in a fire or by a covered cause of loss could otherwise have been sold. A fire insurance policy on a stock of merchandise pays only for the value of damaged or destroyed merchandise, hence the need for profits insurance. Such insurance is generally provided by adding a selling price clause to a policy covering stock. (See selling price clause.)

Property and Casualty Insurance
Non-life insurance. Basically there is a broad insurance distinction between companies writing life and health insurance and those writing the property insurance or "non-life" lines of fire, marine, casualty and surety. Numerous descriptive titles have been employed to describe this "non-life" area of operation. Although no one definition has yet been firmly established, some use the generic title "property and casualty" insurance, while others use "property and liability" insurance.

Property Damage Liability Insurance
A form of "third-party" protection covering the insured's legal liability for damage to property of others caused by the insured's negligence. (See liability insurance.)

Property Insurance
"First-party" insurance of real and personal property against physical loss or damage, not to be confused with property damage liability insurance.

Property Insurance Plans Service Office (PIPSO)
An advisory organization formed in 1972 to provide technical and administrative services to state property or fair plans and windstorm pools. Headquarters: Boston, MA.

Pro Rata Liability Clause
Most standard coverages now place this clause within the other insurance clause to clarify which policy will respond should there be more than one insurer on a risk and all the policies are primary or excess. The amount of loss is proportioned among the insurers based on the percent of their limits of coverage to the total limits provided.

Pro Rata Reinsurance
Reinsurance arrangements by which the reinsurer agrees to take a specified percent of each covered loss for the same percent of premium.

Protection and Indemnity Insurance (P & I Insurance)
Protection and indemnity insurance for shipowners, contractors, and charterers against liabilities arising out of the operation of the vessel for loss of life to any person; illness or injury to passengers and crew; damage to cargo while loading, carrying or unloading cargo, damage to piers and docks; and removal of wreckage as required by law.

Protective Liability Insurance
Insurance against claims which arise because of some secondary cause, such as the negligent act of some subcontractor engaged by a principal contractor or against an employer for the act of an employee. (See contingent liability.)

Public Entity Insurance
Insurance contracts specifically designed to meet the coverage needs of the various city, state, township, county or other municipalities. Normally offered by specialists in the industry and tailored to meet the hazards and exposures of this type of entity.

Public Liability Insurance
Protection which pays sums that an insured is legally obligated to pay, or that the insurer has agreed to pay, as damages to others as a result of the insured's negligence. May cover bodily injury to another or damage to the property of another.

Participating Reinsurance
Any form of reinsurance where the reinsurer participates with another on a pro rata basis. For example, in a quota share arrangement, primary insurer agrees to share 50/50 with reinsurer. If a $100,000 policy is involved, both primary and reinsurer pay $50,000. (See pro rata reinsurance.)

Per Risk Excess Reinsurance
A reinsurance term. Reinsurance and retained limits apply per risk as opposed to per occurrence or in the aggregate. For example, Reinsurer A agrees to reinsure B's losses on four-family dwellings only if a loss per risk exceeds $50,000. So if a block of five B-insured four-family dwellings were lost in a fire, B must pay the first $50,000 on each of the five dwellings.

Portfolio Reinsurance
A term used in reinsurance generally to define the situation where the reinsurer is insuring all risks in a particular line of business for a primary insurer, e.g., in commercial property insurance the reinsurer may pay all commercial property claims in excess of $50,000.

Professional Liability
A class of insurance policies that indemnifies the insured for third-party liability claims due to negligence in the performance of professional services. Professionals include doctors, lawyers, engineers, insurance agents and others.

PLUS (Professional Liability Underwriters Society)
An organization begun in 1986 by industry professionals specializing in the field of professional liability. The society is a forum for education and discussion on addressing various aspects of complex insurance issues involving professional liability. Headquarters: Minneapolis, MN.

Professional Liability Underwriters Society (PLUS)
An organization begun in 1986 by industry professionals specializing in the field of professional liability. The society is a forum for education and discussion on addressing various aspects of complex insurance issues involving professional liability. Headquarters: Minneapolis, MN.

Pro Rata Liability Formula
A formula used to determine the amount of coverage each insurer pays when more than one source of insurance is available to handle a given loss. Take the coverage written by Company A, divide that amount by the total coverage written by all sources and multiply the resulting percentage by the actual loss amount.

Qualified Impairment Insurance
A health insurance rider that eliminates the policy exclusion for impairment, making that impairment acceptable or "qualified" with respect to coverage.

Quasi-Insurance Institutions
Federal, state, or local government institutions which implement and run compulsory government programs that give the appearance of acting in a way similar to the insurance mechanism. Unemployment compensation is an example.

Quota Share Reinsurance
A form of pro rata reinsurance (proportional) in which the reinsurer assumes an agreed percentage of each insurance policy being insured and shares all premiums and losses accordingly with the reinsured.

Radioactive Contamination Insurance
Coverage against loss caused by radioactive contamination. Such coverage is excluded from most insurance contracts and is usually covered under policies issued by pools created for this purpose. Other risks which might occasionally be exposed to damage can obtain this insurance as an additional coverage to an existing policy. The endorsement may be used with a fire form and on inland marine insurance policies, such as transit coverage for truckers or shippers.

Railroad Insurance Rating Bureau (RIRB)
A rating bureau which rates railroad property and files with state insurance departments on behalf of its member companies and subscribers.

Railroad Protective Liability
The standard commercial general liability policy excludes liability for construction or demolition operations on or near railroad property, such as tracks, trestles, sidetracks, etc. In order to provide coverage for this exposure, the railroad protective liability policy is available to provide protective liability coverage for railroad owners, property owners, or contracts from the vicarious acts of contractors or subcontractors who are working on their behalf. The policy is purchased by the subcontractor or contractor in the name of the party needing protection. For example, a contractor demolishing a building near a railroad track may need to purchase a railroad protective liability policy for the property owner, the railroad, or both.

Rain insurance
Insurance against loss due to the fall of rain, which may result in reduced profits or earnings. Also available to vacationers, paying the insured amount if rain occurs on specific days.

Ranchowners Personal Liability Form
An endorsement available in the ranchowners program to purchase non-automobile personal liability protection.

Ransom Insurance
Originated as a policy for financial institutions, primarily banks, and tailored to meet the standard kidnap procedure: forcing the bank to withdraw the ransom money from its vaults and deliver it to a designated place before release of the banker or family. The recent rash of kidnappings on an international scale involving a variety of corporations has created a heavy demand for a broadened coverage. At this time there is a limited market, a disinclination to write in certain countries, and no standardization in rates. The insurance covers named employees for individual or aggregate amounts, with deductibles requiring the insured to participate in about 10% of any loss. Not an easy class to underwrite. Personal accident coverage for kidnap victims is sometimes available.

Real Estate Agents Errors and Omissions Insurance
A type of professional liability or errors and omissions protection designed for real estate agents. It covers damages or losses from negligence caused by the rendering or failing to render of services, or negligence caused by other errors and omissions that may be committed during the performance of duties as a real estate agent.

Re-Entry Term Life Insurance
An endorsement or rider found most often in term life insurance coverage that allows the insured to request increases in coverage periodically at a stable or favorable premium.

Registered Mail Insurance
An inland marine form which insures money and securities for banks and brokers while in transit by registered mail.

Regulation of Insurance
Governmental control of the business of insurance by federal, state or local law.

Reinsurance
1) The transaction whereby an insurance company (the reinsurer), for a consideration, agrees to indemnify another insurance company known as the ceding company (the reinsured) against all or part of a loss which the latter may sustain under a policy or policies it has issued. 2) When referred to as "a reinsurance," the term means the relationship between reinsured(s) and reinsurer(s).

Reinsurance Association of America
A group of property-casualty professional reinsurers formed to undertake programs designed to create a national awareness of the role and function of the reinsurer to the public, governmental bodies and the insurance industry in general. Founded in 1968 with headquarters in Washington, DC.

Reinsurance Capacity
1) With respect to an individual account, insurer, or a book of business, it is the amount a reinsurer has available to commit to that risk, that insurer, or that book of business. 2) On a broader scale, this term is also used to express the total amount available in the national or worldwide basis for reinsurance offerings.

Reinsurance Exchange
A reinsurance operation designed to facilitate the ceding, assumption, offering, or exchange of reinsurance between its members.

Reinsurance Premium
The premiums a ceding insurer must pay the reinsurer for the reinsurance coverage provided.

Reinsurance Ticket
A notation in the form of a separate piece of paper attached to the daily report of an insurer, setting forth the details of reinsurance that has been effected.

Reinsurance Treaty
A reinsurance agreement between an insurance company and a reinsurer, usually for one year or longer, which may be divided into two broad classifications: 1) the participating type which provides for sharing of risks between the ceding company and the reinsurer; and 2) the excess type which provides for indemnity by the reinsurer only for loss which exceeds some specified predetermined amount.

Renewable Term Life Insurance
A term life insurance coverage that offers the renewal of the coverage without making the insured take physical exams or otherwise prove insurability.

Rent Insurance
Insurance which reimburses a building owner against loss of rental income if the building is not usable by a tenant because of some cause of loss insured against. No longer a separate coverage form by itself; now incorporated into the inclusive business income coverage form.

Rental Value Insurance
Insurance which reimburses a building owner against loss of rental income if the building is not usable by a tenant because of some cause of loss insured against. No longer a separate coverage form by itself; now incorporated into the inclusive business income coverage form.

Replacement Cost Insurance
Protection which pays the cost to restore or replace damaged or destroyed property without deduction for depreciation. Automatically included in homeowners forms. (See actual cash value.)

Retroactive Insurance
The promise of an insurer, made after the occurrence of bodily injury and/or property damage, to pay up to a specified maximum legal liability of the insured ensuing from such injury or damage.

RIMS--Risk and Insurance Management Society, Inc.
Previously known as American Society of Insurance Management, Inc. (ASIM). Formed in 1950, a nonprofit association dedicated to the advancement of professional standards of risk management. RIMS sponsors educational programs and maintains relationships with insurers, brokers, rating organizations, and regulatory and governmental bodies. Headquarters: New York, NY.

Riot and Civil Commotion Insurance
Insurance against damage done by rioters or those engaged in civil commotion, included in the extended coverage endorsement to the standard fire policy. (See civil commotion.)

RIRB--Railroad Insurance Rating Bureau
A rating bureau which rates railroad property and files with state insurance departments on behalf of its member companies and subscribers.

Risk and Insurance Management Society, Inc. (RIMS)
Previously known as American Society of Insurance Management, Inc. (ASIM). Formed in 1950, a nonprofit association dedicated to the advancement of professional standards of risk management. RIMS sponsors educational programs and maintains relationships with insurers, brokers, rating organizations, and regulatory and governmental bodies. Headquarters: New York, NY.

Reduced Paid-Up Insurance Option
One of the whole life nonforfeiture options. The company purchases a paid-up life insurance policy for whatever limit the cash value in the original policy will fund. (See also nonforfeiture options.)

Residual Value Insurance
A type of business risk faced by leasing parties which involves the property being returned at the end of a lease having less market value than assumed when the agreement was written. Example: A car leasing agreement assumed that, after one year, the vehicle would be worth $10,000 but it ends up with a value of $7,200. Residual value insurance protects a lessor against such value shortfalls.

RVI (Residual Value Insurance)
A type of business risk faced by leasing parties which involves the property being returned at the end of a lease having less market value than assumed when the agreement was written. Example: A car leasing agreement assumed that, after one year, the vehicle would be worth $10,000 but it ends up with a value of $7,200. Residual value insurance protects a lessor against such value shortfalls.

Reinsurance Commission
The commission paid by the reinsurer to the ceding company (primary insurer) on reinsurance agreements as compensation to place the business with the reinsurer and to cover the ceding company's acquisition expenses.

Safe Burglary Insurance
Protection against loss of property caused by forcible entry into a safe or vault. Damage to safes, vaults and other property on the premises resulting from burglary is also covered unless caused by fire. This policy has been replaced with the Simplified Commercial Crime Coverage Forms A through R.

Safe Deposit Box Insurance
Insurance against the loss of property contained in a safe deposit box. This policy has been replaced with the Simplified Commercial Crime Coverage Forms A through R.

Satellite and Space Vehicles Insurance
Highly specialized property insurance designed to protect satellites, space vehicles, and related equipment against physical damage losses. Coverage options and endorsements may include protection for loss of income and expenses. Four types of coverage are available: pre-ignition, launch, in-orbit, and ground support.

SEC Liability
The liability that those parties who offer and sell publicly traded stock expose themselves to as a result of the Federal Securities Act of 1933 and the Federal Securities Exchange Act of 1934. These acts place strict obligations on parties offering stock, specifically regarding the issues of disclose of information on the offering. Any misrepresentations, intentional or not, can result in liability.

Self-Insurance
The retention of sufficient exposure units by an entity to permit the operation of the law of large numbers. Self insurance is a term often mistakenly used to describe the situation when an entity decides to retain its own risks. The mistake arises when the exposure units are too few in number to permit the application of the law of large numbers. When the exposure units are too few, a better and less misleading term of such a practice is "self-assumption of risk."

Selling Agents Commission Insurance
Protection to indemnify an independent sales agent, sometimes known as a manufacturer's representative, for lost commissions on orders already received due to the inability of the manufacturer to produce the goods because of fire or other insured cause of loss.

Servicemen's Group Life Insurance (SGLI)
A group life insurance program developed specifically for members of the armed services who often have difficulty obtaining life insurance at affordable rates in the open market.

Snowmobile Insurance
Covers snowmobiles against physical damage to the equipment, and legal liability for their use and operation.

Society of Insurance Accountants (SIA)
An organization devoted to the discussion of accounting and statistical and management problems and to the interchange of ideas with the objective of fostering the value of the accounting and statistical functions to the insurance industry. Headquarters: New York, NY.

Society of Insurance Research
Stimulates research affecting all lines of insurance and fosters exchange on research methodology among society members. Headquarters: Appleton, Wl.

Society of Insurance Trainers and Educators (SITE)
An organization of education and training directors from all sections of the insurance industry. The society's aim is to improve training methods and techniques for both company personnel and agents.

Specific Insurance
A single amount of insurance covering a single type of insurable property, e.g., building or contents, used in contrast with blanket insurance. Thus, a policy providing one amount of coverage on building and contents would be blanket insurance, whereas one providing a certain amount on the building and another amount on the contents would be specific insurance.

Specified Disease Insurance
A health insurance policy designed to provide benefits for the services, expenses and fees for treatment if the covered person(s) contract the disease or diseases specifically addressed by the policy. Common examples are cancer or AIDS.

Spread Loss Reinsurance
A type of excess of loss property reinsurance which provides for a periodic adjustment of the reinsurance premium rate based on the reinsured's experience for preceding years (usually three or five) plus a loading for the purpose of compensating the reinsurer for: 1) its expenses 2) the possibility of unusual losses 3) those losses occurring at the end of the period of the treaty, which the reinsurer might not have a chance to recoup if the treaty is not renewed 4) a catastrophe possibility and 5) the reinsurer's profit. In casualty reinsurance, adjustments to the above may be required for such other factors as economic and social inflation. Also known as carpenter plan. (See Carpenter Plan.)

Sprinkler Leakage Insurance
Insurance against the damage done by the accidental discharge of water from automatic sprinklers and similar fire prevention devices.

State Association of Insurance Agents
In each state, insurance agents have formed organizations to discuss their problems and promote the best interests of the American Agency System. Together these state associations make up the national Independent Insurance Agents of America or the Professional Insurance Agents. IIAA is mostly stock agents and PIA is mostly mutual, but both support the American Agency System.

Stock Insurance Company
Insurance business transacted by an insurer whose ownership element is divided into shares of stock represented by certificates, as opposed to a mutual insurer which does not have capital stock and whose ownership element is divided among its policyholders. While a stock insurer has both stockholders (its owners) and policyholders (its customers), a mutual insurer has only policyholders (its owners and customers). (See mutual insurance.)

Stop-Loss Reinsurance
A company wishing to protect itself in the event its net loss ratio for a given year rises above a certain percentage may buy reinsurance which pays in excess of that figure up to a higher agreed percentage, beyond which the company is once more liable. In short, a plan which takes the sting out of an above-average net loss ratio. (See excess of loss reinsurance.)

Storekeepers Liability Policy
A package policy designed for retail store operators, insuring against claims for bodily injury and property damage arising from their business operations. Excludes automobile liability. This policy is now basically obsolete and rarely used, replaced by current versions of the businessowners policy.

Strict Liability
Strict liability is a legal doctrine applying to tort law that basically holds the manufacturer, wholesaler and/or retailers (or in the case of property--the owner) liable for injuries that may be caused by defective or dangerous products or premises conditions. It does not require the injured party to prove negligence. Negligence can be assumed because of the inherent danger of the product, defect or premises condition. Strict liability, however, is not absolute liability.

Superintendent of Insurance
The official of a state charged with the duty of enforcing its insurance laws. Called the superintendent of insurance (in three states) and director of insurance (in eight states). The official is elected in 11 states, appointed by a governor or state agency in 38 states, and is a civil service appointee in Colorado.

Surgeons Professional Liability Insurance
Protects physicians and surgeons against claims for personal injury arising from malpractice, errors or mistakes in rendering professional services. At this time a most expensive coverage due to high jury awards against the medical profession.

Surplus Lines Insurance
Insurance written by insurers not licensed in the states where the risks are located and placed with such insurers under the surplus line laws of the various states. Before such placements can be made through specially licensed surplus line agents and brokers, state laws generally require evidence reported before some predetermined future date ("sunset").

Savings Bank Life Insurance (SBLI)
Life insurance sold by savings banks in New York, Massachusetts and Connecticut.

Second To Die Life Insurance
In a life insurance contract, a clause which states that the beneficiary must survive the insured by X number of days for the beneficiary to be paid the proceeds. Otherwise, the benefits will defer to the contingent beneficiary or the estate of the insured if no contingent beneficiary is designated.

Short-Term Disability Income Insurance
Usually less than one year, often 13- 26-or 52-week plans often sold as part of an employee benefits plan. Also known as weekly income plans.

Straight Life Insurance
A cash value insurance policy that requires premium payments for the life of the insured.

Supplemental Group Life Insurance
Usually an optional form of group life insurance (over and above the existing group life plan) that an employee can elect and most probably will have to pay all the premiums for.

Ship Repairers' Liability
Comprehensive liability insurance that protects ship repair operations against their legal liability for their activities (renovations, repairs, movement of property before or after projects) that may cause damage or injury to third parties.

Single Risk Reinsurance
Reinsurance effected item by item and accepted or declined by the reinsuring company after scrutiny, as opposed to reinsurance effected by treaty. The word facultative connotes that both the primary insurer and the reinsurer have the faculty or option of accepting or rejecting the individual submission, as distinguished from the preset obligation to cede and accept already agreed upon by the parties in treaty reinsurance.

Stevedore's Legal Liability
Stevedores unload and load cargoes from ships, railroad cars, trucks, etc. Stevedore's liability is a form of insurance that assists with claims related to their operations, whether they are connected to atransportation terminals or do business as independent contractors.

Takeover Defense Insurance
Protection to reimburse a corporation for expenses incurred, such as legal, investment advisory, communications, accounting, and similar types of expenses, in successfully resisting an attempt to assume its ownership or control by a stock tender offer. Corporations eligible are those whose stock is either traded on public exchanges or which are registered under Section 12 of the Securities Exchange Act of 1934.

Tax Audit Insurance
A type of specialty insurance coverage that provides funds to reimburse taxpayers for any additional expenses which may be incurred should the Internal Revenue Service (IRS) audit their tax returns. It does not pay for fines or penalties. Coverage is for reproductions, costs of records and related types of expenses.

Tender Offer Defense Expense Insurance
Protection to reimburse a corporation for expenses incurred such as legal, investment advisory, communications, accounting, and similar types of expenses, in successfully resisting an attempt to assume its ownership or control by a stock tender offer. Corporations eligible are those whose stock is either traded on public exchanges or which are registered under Section 12 of the Securities Exchange Act of 1934.

Term Insurance
A type of life insurance policy that is not whole life or written to cover the whole remainder of the insured's lifetime, but instead is written to cover only a period of time. Often that period of time is a set number of years, such as 1 year, 10 years or 20 years. At other times, the policy is written for a term that expires at a specified age, for example, when the insured turns 65. (See level term life insurance.)

Terrorist Insurance
Property insurance coverages or policies designed to protect an insured against physical damage caused by terrorist acts.

Third-Party Insurance
Protection against liability to a third party. The first two parties are the insured and the insurer.

Ticket, Reinsurance
A notation in the form of a separate piece of paper attached to the daily report of an insurer, setting forth the details of reinsurance that has been effected.

Time Element Insurance
A coverage which pays for loss of earnings or income when business operations are interrupted, curtailed or suspended due to property loss as a result of an insured cause of loss. Also covered are loss of rents and rental value. The current commercial time element coverage forms are business income and extra expense. Extra expense covers costs incurred to continue operations at another location.

Title Insurance
Protection which indemnifies the purchaser of real estate against loss occasioned from defects in the legal title. A title insurance policy extends for the lifetime of the insured while owning the insured property. Largely written by insurers specializing in this class alone.

Tornado Insurance
Protection against damage done to property by unusually high winds, cyclones, tornadoes, or hurricanes.

Transportation Insurance
Insurance on merchandise and/or cargo while it is being moved and is subject to loss or damage during transportation. This insurance may also protect while in a warehouse. Coverage is also available for property serving as either an instrument of transportation or of communication, such as bridges, tunnels and television transmission towers. The writing of this type of protection is usually within the province of marine or inland marine underwriters.

Travel Accident Insurance
A type of life or accident policy sold at airports, bus stations and railroads to provide coverage for bodily injury, accidents or death suffered by passengers while traveling on the aircraft, bus or railroad. The coverage may be sold by ticket agents or in vending machines.

Travel Agents Errors and Omissions Insurance
Specially designed professional liability or errors and omissions insurance to protect travel agent from losses caused by negligent acts, rendering or failing to render services, and errors and omissions of not only the named insured errors, but often, employees, tour guides, and tour operators contracted by the insured.

Treaty, Reinsurance
A reinsurance agreement between an insurance company and a reinsurer, usually for one year or longer, which may be divided into two broad classifications: 1) the participating type which provides for sharing of risks between the ceding company and the reinsurer; and 2) the excess type which provides for indemnity by the reinsurer only for loss which exceeds some specified predetermined amount.

Trip Insurance
Insurance written to cover a single shipment of household furniture, personal effects, merchandise, and livestock against loss by specified perils or "all risk."

Trip Transit Insurance
Insurance written to cover a single shipment of household furniture, personal effects, merchandise, and livestock against loss by specified perils or "all risk."

Truckers Liability
Auto liability exposures experienced by owners and operators of businesses designed to transport the goods of others by land motor vehicles for a fee. Subject to regulations by the Department of Transportation (DOT). The Insurance Services Office (ISO) has designed a special business automobile insurance for this purpose, called the truckers liability coverage form. Also available is the motor truck carriers liability coverage form.

True Group Insurance
A group insurance program is one in which an entire related group of people is offered access to the same insurance coverage, normally life, health, accident, and/or disability. In a true group, coverage is offered regardless of their past medical history or current medical conditions. Because coverage is offered to an entire group, marketing and other insurer expenses are not as great, so savings are passed onto the group in the form of lower premiums. In those cases where the group insurance is being offered as an employee benefit by an employer, employers often will subsidize a portion of the premium.

Turnkey Insurance
A specially designed professional or errors and omissions liability insurance which includes coverage for engineering, design, products, and completed operations for contractors, architects, and/or engineers on specific construction projects.

Temporary Insurance Agreement
A life insurance term used to describe the amount of insurance provided by the insurer between the period of time when the application is taken and the first mode of premium is made and the time the policy is issued. The limit of insurance on the temporary agreement may be less than the policy limit applied for. Most often the temporary insurance agreement is designed to pay if the insured dies before the policy is issued only if that company would have issued the policy except for the prior death of the insured.

Tri-National Insurance Working Group
A semiofficial group of insurance experts created as a result of the North American Free Trade Agreement. The group’s focus is upon developing practices to allow for the uniform application of insurance protection throughout Canada, Mexico and the U.S.

Tankerman's Legal Liability
Tankerman operations involve loading and unloading all types of cargo transported by tanker vessels. Many types of cargo they handle are inherently dangerous. Tankerman's legal liability insures these operations from damage or injury to third parties. The damage or injury must be related to their loading/unloading activities.

Terminal Operators' Liability
A broad form of public liability insurance for organizations that operate marine terminals.

Terminal Operator's Liability
Typically refers to a type of liability policy that protects a terminal operator against claims by third parties. The claims involve damage or loss to property owned by third parties that was under the care, control or custody of the terminal operator. Terminal may mean any number of things such as piers, wharves, docks, etc.

Umbrella Liability Insurance
A form of liability insurance protecting policyholders for claims in excess of the limits of their primary automobile, general liability and workers compensation policies, and for some (few) claims excluded by their primary policies which are subject to a deductible, which may range from $250 for a personal umbrella to a minimum of $10,000 for a commercial umbrella.

Unauthorized Insurance
Insurance written by an insurer not licensed by the country or state in which the risk is located.

Underinsurance
Insurance which is insufficient in amount to cover a loss which the policyholder may suffer.

Underlying Insurance Policy
The basic or primary layer of coverage, the initial policy that will respond to the covered loss. Only when the limits of the underlying policy have been exhausted, will the other respective layers of insurance respond, as with the case of an excess or umbrella policy in liability insurance.

Unemployment Insurance
A federally designed option available to finance the employer's portion of the cost of unemployment compensation for specific, qualified operations. This option allows the employer either to self-insure and/or to purchase available specialty insurance, usually available on a stop loss or excess of loss basis.

United States Aircraft Insurance Group (USAIG)
A multi-company aviation pool writing a substantial volume of most types of aviation coverages, both domestic and international. Founded in 1928. Headquarters: New York, NY.

Universal Life Insurance
A combination of monthly term life insurance plus possible savings in an arrangement that provides limited flexibility as to death benefits and premium payment.

Universal Variable Life Insurance
A type of life insurance program that combines coverage, options, and/or benefit features of both universal life and variable life insurance policies. The insurer may select options regarding the investment of both the policy premium and any interest or dividends earned.

USAIG--United States Aircraft Insurance Group
A multi-company aviation pool writing a substantial volume of most types of aviation coverages, both domestic and international. Founded in 1928. Headquarters: New York, NY.

Variable Life Insurance
A type of life insurance where payout or benefits are not a fixed amount, but rather are variable depending on the investment earnings accumulated. The insured is allowed the investment option and/or the stock portfolio desired. The cash surrender value or benefits are tied directly to the income earned by the investments.

Variable Premium Llife Insurance
Life insurance programs most commonly found in universal life, in which the premium due is variable. The variation in premium will depend on the investment earnings from earned dividends that may be reinvested and used to pay premiums.

Veterinarian Professional Liability Insurance
Specially designed professional liability insurance to protect veterinarians from claims alleging injury or loss that may result from the rendering or failing to render, errors or mistakes in professional veterinarian services.

Voluntary Insurance
Insurance coverage offered by voluntary insurers, that is, not required to be purchased by any federal or state requirement.

Variable Universal Life Insurance
A universal life insurance contract invested in equities. The VUL policy retains the features of universal life insurance but can be more volatile because of the equities investments. The VUL contract is considered a security and must be registered with the SEC as well as the state insurance department and agents must have both a life and NASD securities license to sell the product.

Virtual Insurance
An evolving term that typically refers (theoretically) to any form of insurance coverage that is sold, delivered and serviced electronically, specifically via the Internet. Another term is e-insurance.

Valuable Papers and Records Insurance
Provides coverage for the replacement of a commercial operation's valuable papers, records and forms, including electronic media. Typically, coverage is limited to the cost of recreating or restoring the lost or damaged documentation.

Vermont Captive Insurance Association
An association of captive insurers and related organizations that promotes the captive insurance mechanism through education, lobbying, communication and sponsoring annual meetings and seminars. Headquarters: Burlington, VT.

War Risk Insurance
Insurance against loss or damage to property due to war. It is freely written on marine risks but not on property or land. During World War II, the government insured war risks on land.

Warehousepersons Legal Liability Policy
Covers responsibility for loss or damage to property in the insured's warehouse.

Water Damage Insurance
Insurance against loss due to the accidental presence of water (other than flood or surface water) in places it is not supposed to be.

Wave Damage Insurance
Insurance against damage done by the action of waves, as opposed to damage done by the wind alone. Wave damage is excluded by policies covering wind damage and must be insured by a special policy or clause attached to a policy.

Weather Insurance
A specialty insurance that provides coverage for loss of income and/or expenses when an outdoor special event must be canceled or postponed due to weather conditions. Usually written on a per-event basis.

Whole Life Insurance
A common type of life insurance coverage providing a face value death benefit for the entire or whole life of the insured, unless the insured should cancel or not pay premiums.

Windstorm (Including Tornado and Cyclone) Insurance
Protection against damage done to property by unusually high winds, cyclones, tornadoes, or hurricanes. Today windstorm insurance is not available except under an extended coverage endorsement.

Workers Compensation Insurance
Protection which provides benefits to employees for any injury or contracted disease arising out of and in the course of employment. All states have laws which require such protection for workers and prescribe the length and amount of such benefits provided.

Wedding Insurance
A special event policy that protects against loss from an unforeseen circumstances that affects wedding plans such as the cost to cancel and reschedule, having to replace a caterer or band, loss of wedding attire or rings, etc.

Wharfinger's Liability
A type of insurance that protects parties who own wharves. The insurance applies to damage suffered by cargo, ships and other property that is located on a covered party's wharf (dock) or that occurs to a vessel that breaks away from the dock. Such losses occur during docking, loading/unloading and/or when a vessel is being refueled or re-supplied.

Yacht Insurance
A marine insurance designed to provide property damage or hull coverage for yachts, cabin cruisers, and sailing vessels. Some will also cover small inboard motors and other personal vessels.

Yearly (annual) Renewable Term Insurance
A term life insurance policy that the insured can renew for a specific number of years without proving insurability. Each year the premium on the policy rises.