The definitions appearing in this Glossary are provided solely for general informational purposes. They are not intended to be complete descriptions of all terms, conditions and exclusions applicable to the products and services defined. As well, in the case of any inconsistency between the definitions in this Glossary and the definitions appearing in the actual policy, the definitions contained in the actual policy shall govern. In all cases, the insurance provider's products and services are governed by the terms and conditions of the actual policy, and the laws of the jurisdiction in which the products and services are offered.
ACCIDENT An unexpected event which happens by chance and is not expected in the normal course of events.
ACT OF GOD A sudden and violent act of nature which could not have been foreseen or prevented. Examples: flood, earthquake
ACTUAL CASH VALUE The current cost of replacing an article with a similar one in the same condition. Any item has three basic values: original cost, actual cash value, and replacement value. For example, if you originally paid $400 for your living room couch; its actual cash value might be $175. But if it's destroyed in a fire, replacing it will cost you $800.
ADDITIONAL INTEREST INSURED Another person or company who may be liable for an accident involving an insured or an insured vehicle and who has been named as an Additional Interest Insured under the policy.
ADDITIONAL PREMIUM An extra charge for an alteration, during the policy period, which increases the hazard or the Company's liability.
ADJUSTER A person who investigates a loss and negotiates settlement with the claimant on the Company's behalf.
AGGREGATE LIMIT For various types of insurance, an aggregate limit is the maximum amount of money an insurer will pay for all your covered losses during the policy period, typically one year.
ALL PERILS An optional coverage designed to provide protection for your vehicle for all types of losses except those specifically excluded in your policy. All perils coverage is the most complete coverage you can select to protect yourself from loss or damage to your own vehicle. This coverage is optional and may be purchased in addition to the mandatory coverages required by law, and it is subject to a deductible.
ALL RISK Coverage against loss or damage from all perils except those specifically excluded.
AMOUNT OF RISK The Company's total liability at a specific location
APPLICATION (APP) A form on which the prospective insured states facts requested by the insurance company and on the basis of which (together with any information from other sources) the insurance company decides whether or not to accept the risk, modify the coverage offered, or decline the risk.
APPRAISAL A valuation of property made for determining its insurable value or the amount of loss sustained.
ARBITRATION is an alternative to going to court over a business dispute. Instead, a neutral third party is recruited to settle the dispute.
ARSON The willful and malicious burning of property.
ASSUMED LIABILITY Liability which would not rest upon a person except that he has accepted responsibility by contract expressed or implied. This is also known as contractual liability.
ASSURANCE Same as "insurance".
ASSURED Same as "insured".
ASSURER Same as "insurer" (insurance company).
AUTHORIZATION The power or right to act on behalf of another.
AVOIDANCE OF RISK Taking steps to remove a hazard, engage in an alternative activity, or otherwise end a specific exposure.
Back To TopBASIC RATE The standard charge for a given type of risk.
BI/PD Bodily Injury / Property Damage Liability Coverage.
BINDER A temporary or preliminary agreement which provides coverage until a policy can be written or delivered.
BODILY INJURY LIABILITY Pays when an insured person is legally liable for bodily injury or death caused by your vehicle or your operation of most non-owned vehicles. This coverage also pays for your legal defence if you are sued.
BROAD FORM Any of the commercial or personal lines property forms which provide coverage on a named perils basis. This form normally adds the Extended Coverage and Vandalism and Malicious Mischief coverages. This form is generally used for coverages on a Homeowners Policy
BROKER An independent person or firm who acts on behalf of the insured in placing business with the insurance company. Responsible for the collection of premiums but having no authority to give coverage on the insurance company's behalf without their specific agreement. Compensation is on a commission basis.
BURGLARY Unlawful removal of property from premises involving visible forcible entry.
BUSINESS INTERRUPTION Insurance against business expenses and loss of income resulting from fire or other insured peril.
BUSINESS OWNER’S POLICY is defined as the combination of two important forms of insurance – commercial property and general liability – into one convenient package. Business owner’s policies usually cost less than buying the two coverages separately.
BUSINESS PERSONAL PROPERTY (BPP), or business contents, refers to moveable items owned by your business. It includes office supplies, furniture, computers, machinery – basically everything except for the building itself.
Back To TopCANCELLATION Termination of an insurance coverage during the policy period by the voluntary act of the insurance company or insured, effected in accordance with provisions in the contract or by mutual agreement.
CATASTROPHE A sudden, great disaster.
CERTIFICATE OF LIABILITY INSURANCE A certificate of liability insurance is a document that proves you have liability insurance coverage.
CLAIM Notice to an insurer that under the terms of a policy, a loss may be covered.
CLAIMANT is someone who files a request to receive payment under the terms of an insurance policy.
CLAUSE A term used to identify a particular part of a policy or endorsement.
COINSURANCE (1) In property insurance, a clause under which the insured shares in losses to the extent that he is underinsured at the time of loss.
COLLISION COVERAGE An optional coverage designed to provide protection for your vehicle when damage occurs as a result of a collision with another object. This coverage is optional and may be purchased in addition to the mandatory coverages required by law, and it is subject to a deductible.
COMMERCIAL PACKAGE POLICY is an insurance policy that packages together a variety of both liability and property coverage(s) to provide coverage for commercial entities
COMPREHENSIVE INSURANCE Comprehensive insurance reimburses you for damage to your own car from causes other than collision or overturning. The comprehensive portion of your policy pays for loss due to perils like hail, flood, theft, fire, glass breakage, falling objects, missiles, explosions, earthquakes, windstorms, vandalism or malicious mischief, riot or civil commotion, and collision with a bird or an animal.
When you look at a policy's comprehensive coverage, check for exclusions or limitations. If you have a special audio system installed in your car, for example, you should make sure your policy would cover the cost of the equipment if it were damaged or stolen.
It's also important to know if the policy pays for the actual cash value of damaged or stolen property (its current value after depreciation has been subtracted or the full amount required to replace it today.)
COMPULSORY INSURANCE Any form of insurance which is required by law.
CONTINUITY DATE A continuity date refers to the earliest date from which a small business has maintained continuous insurance coverage.
CONSEQUENTIAL DAMAGE A loss which is an indirect result of an accident or fire, e.g. food spoiled through breakdown of a refrigerator.
COVER To insure.
COVERAGE Insurance.
CYBER LIABILITY INSURANCE First-party cyber liability insurance protects small businesses against the financial impact of data breaches and cyberattacks. Third-party cyber liability insurance can pay for a business's legal expenses if one of its clients files a lawsuit after experiencing a data breach.
Back To TopDECLARATIONS (DEC SHEET) A term used in insurance for the portion of the contract which contains information such as the name and address of the insured, the property insured, its location and description, the policy period, the amount of insurance coverage, applicable premiums, and supplemental representations by the insured.
DEDUCTIBLE The portion of a loss that you are required to pay before your insurance coverage will respond. Deductibles can be used to reduce your physical damage premiums. For example, if you owned a policy with a $200 deductible and you suffered a covered loss totaling $1,000, you would pay the first $200 and the insurance company would pay the remaining $800. If the loss were only $200, you would pay the entire amount and the insurance company would pay nothing.
DEPRECIATION Decrease in the value of property over a period of time due to use, wear, tear, and obsolescence. For example, if you paid $500 for a television set five years ago, its current value minus depreciation might be only $125, for example.
DIRECT LOSS (OR DAMAGE) A loss which is a direct consequence of a particular peril. Fire damage to a refrigerator would be a direct loss. Spoiling of food in the refrigerator as a result of the fire damage would be an indirect loss.
DIRECT WRITER An insurance company which sells its policies through salaried employees (licensed agents) who represent it exclusively, rather than through independent local agents, who represent several insurance companies.
DISABILITY INSURANCE provides income in case a business owner or employee is unable to work due to an illness or injury that occurred away from work. Workers’ compensation provides insurance for work-related disabilities.
DISASTER RECOVERY PLAN A disaster recovery plan is a set of procedures and steps to protect businesses and aid in recovery after a natural or man-made disaster.
Back To TopEARTHQUAKE INSURANCE Insurance covering damage caused by an earthquake as defined in the contract.
EFFECTIVE DATE The date on which an insurance policy or bond goes into effect, and from which protection is furnished.
EMBEZZLEMENT The fraudulent use of money or property which has been entrusted to one's care.
EMPLOYERS LIABILITY INSURANCE Coverage against common law liability of an employer for accidents to employees, as distinguished from liability imposed by a workers' compensation law.
ENDORSEMENT Amendment to the policy used to add or delete coverage. Also referred to as a "rider."
ERRORS AND OMISSIONS INSURANCE Errors and omissions (E&O) insurance is a form of insurance that covers business mistakes or undelivered services that caused financial harm to a customer.
EXCLUSIONS Certain causes and conditions, listed in the policy, which are not covered.
EXPIRATION The date upon which a policy will end.
EXPOSURE Degree of hazard threatening a risk because of external or internal physical conditions.
EXTENDED COVERAGE (EC) A common extension of property insurance beyond coverage for fire and lightning. Extended coverage adds insurance against loss by the perils of windstorm, hail, explosion, riot and riot attending a strike (civil commotion), aircraft damage, vehicle damage, smoke damage and volcanic eruption.
Back To TopFAIR MARKET VALUE The price that a willing buyer would pay a willing seller, neither being under any compulsion to sell or buy.
FIRE Combustion sufficient to produce a spark, flame, or glow and which is hostile (as opposed to friendly i.e., not in the place where it is intended to be, such as in a furnace.)
FIRE INSURANCE Coverage for loss of or damage to a building and/or contents due to fire.
FIRE RESISTIVE CONSTRUCTION A building which has exterior walls, floors, and roof constructed of masonry or other fire-resistive materials.
FLOATER POLICY A policy under the terms of which protection follows moveable property, covering it wherever it may be.
FLOOD INSURANCE A form of insurance designed to reimburse property owners from loss due to the defined peril of flood. Usually sold in connection with a government Flood Insurance plan.
FORGERY In general, any false writing with intent to defraud.
FORM An insurance policy itself or riders and endorsements attached to it.
FORTUITOUS EVENT An unforeseen accident.
Back To TopGENERAL AVERAGE Damages are deliberately incurred by the master of the vessel, including jettison of some of the cargo, or incurring towing charges in order to save the ship and cargo from a threatened peril. These costs, called general average sacrifices, are proportioned among all of the parties to the marine adventure, including the owners of the cargo and the ship-owner.
GENERAL LIABILITY INSURANCE is defined as insurance protection for third-party property damage or personal / advertising injuries allegedly caused by you or an employee.
GRACE PERIOD A period after the premium due date, during which an overdue premium may be paid without penalty. The policy remains in force throughout this period.
Back To TopHAZARD A specific situation that increases the probability of the occurrence of loss arising from a peril, or that may influence the extent of the loss. For example, accident, sickness, fire, flood, liability, burglary, and explosion are perils. Slippery floors, unsanitary conditions, shingled roofs, congested traffic, unguarded premises, and uninspected boilers are also hazards.
HOLD HARMLESS AGREEMENT Hold Harmless Agreements are contracts signed with marinas before a boat is allowed stored in that facility. Check to see whether you have complied with your insurers requirements
HOUSEKEEPING The general care, cleanliness and maintenance of an insured property.
Back To TopIMPROVEMENTS AND BETTERMENTS Additions or changes made by a lessee at his own cost to a building which he is occupying which enhance its value. These become part of the realty and require special insurance consideration.
INDEMNIFY To restore the victim of a loss, in whole or in part, by payment, repair, or replacement.
INDIRECT LOSS (OR DAMAGE) Loss resulting from a peril, but not caused directly and immediately thereby. For example: Loss of property due to fire is a direct loss, while the loss of rental income as the result of the fire would be an indirect loss.
IN-FORCE Insurance on which the premiums are being paid or have been fully paid. In life insurance, usually refers to insurance by face amount. In health, usually refers to premium volume being paid to insurance company or insurance companies in aggregate.
INFLATION PROTECTION is a supplemental coverage that if indicated as being included in the Declarations pages, acts to increase the limits on the insured building, stock, and/or equipment by a percentage attributable to inflation in return for a premium charged appropriate to that increase
INLAND MARINE INSURANCE A branch of the insurance business which developed from the insuring of shipments which did not involve ocean voyages. Exposures eligible for this form of protection are described in the nation-wide definition of Marine Insurance. Such diverse properties as bridges tunnels, jewelry and furs can now be written under Inland Marine forms.
INSPECTION Independent checking on facts about an applicant or claimant, usually by a commercial inspection agency.
INSURABILITY Acceptability of an applicant for insurance to the insurance company.
INSURANCE A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to assume, to a specified extent, the losses suffered by the insured.
INSURANCE ADJUSTER An insurance adjuster is someone responsible for investigating and settling claims submitted to an insurer.
INSURANCE ENDORSEMENTS An insurance endorsement is defined as a modification of an insurance policy that adds, deletes, or excludes coverage.
INSURANCE POLICY Legal document issued to the insured setting out the terms of the contract of insurance.
INSURANCE TO VALUE Insurance written in an amount approximating the value of the property insured.
INSURED The person (or persons) whose risk of financial loss from an insured peril is protected by the policy. Sometimes call the "policyholder".
INSURER The Insurance Company.
Back To TopJOINT TENANCY Ownership of property shared equally by two or more parties under which the survivor assumes complete ownership. This is different from a tenancy in common where the heirs of a deceased party to the tenancy inherit his or her share.
Back To TopLAPSE Termination of a policy because of failure to pay the premium.
LESSEE The person to whom a lease is granted, commonly called the tenant.
LESSOR The person granting a lease, also known as the landlord.
LEGAL LIABILITY refers to the responsibility small business owners have under the law for the injuries or losses they inflict upon others.
LIABILITY INSURANCE In an accident where you are charged with injuring another person or damaging his or her property, liability insurance pays the cost of your legal defence, as well as the cost of any damages for which you are found legally responsible.
LIABILITY LIMITS The sum or sums beyond which a liability insurance company does not protect the insured on a particular policy.
LIBEL A written statement about someone which is personally injurious to that individual.
LIMIT OF LIABILITY The maximum amount which an insurance company agrees to pay in case of loss.
LIMITS Maximum amount a policy will pay either overall or under a particular coverage.
LOSS Generally refers to (1) the amount of reduction in the value of an insured's property caused by an insured peril, (2) the amount sought through an insured's claim, or (3) the amount paid on behalf of an insured under an insurance contract.
LOSS OF USE INSURANCE Coverage to compensate an insured for the loss of use of property if it cannot be used because of a peril covered by the policy.
Back To TopMARKET VALUE The price for which something would sell, especially the value of certain types of assets, such as stocks and bonds. It is based on what they would sell for under current market conditions. For example, common stock market value would be the price of the stock as of a specified date.
MATERIAL MISREPRESENTATION The policyholder / applicant makes a false statement of any material (important) fact on his/her application. For instance, the policyholder provides false information regarding the location where the vehicle is garaged.
MINIMUM EARNED PREMIUM The minimum earned premium, sometimes referred to as minimum retained premium, is the smallest amount of money an insurance company is willing to accept for writing a business insurance policy.
MORTGAGE INSURANCE POLICY In life and health insurance, a policy the benefits from which are intended to pay off the balance due on a mortgage or meet the payments on a mortgage as they fall due upon or after the death or disability of the insured.
MORTGAGEE The creditor to whom a mortgage is given and who lends money on the security of the value of the property mortgaged.
MORTGAGOR The debtor who receives money and in turn grants a mortgage on his property as security for a loan.
Back To TopNAMED INSURED The first person in whose name the insurance policy is issued.
NAMED PERILS Coverage is a type of commercial property insurance that only protects you against losses your policy specifically lists
NEGLIGENCE Failure to use that degree of care which an ordinary person of reasonable prudence would use under the given circumstances. Negligence may be constituted by acts of either omission or commission or both.
NOSE COVERAGE Refers to insurance protection for incidents that occurred before you purchased your current claims-made insurance policy.
Back To TopOCCASIONAL DRIVER The person who is not the primary or principal driver of the vehicle.
OCCUPANCY In insurance, this term refers to the type and character of the use of property in question.
OCCURRENCE An event that results in an insured loss. In some lines of insurance, such as Liability, it is distinguished from accident in that the loss does not have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected nor intended by the insured.
OPEN PERILS Opens perils coverage refers to a type of property insurance that covers damage to your possessions from all causes except those your policy specifically excludes.
ORDINARY PAYROLL Means the entire payroll expense for all your employees, except officers, executives, department managers and employees under contract whose services would not be dispensed with should the “Business” be interfered with or interrupted.
Back To TopPARTIAL LOSS A loss under an insurance policy which does not either (1) completely destroy or render worthless the insured property, or (2) exhaust the insurance applying thereto.
PERIL Cause of a possible loss. For example, fire, theft, or hail.
PER-OCCURRENCE LIMIT The per-occurrence limit is the most your insurance company will pay for a single covered loss under the terms of your policy.
PERSONAL AND ADVERTISING INJURY is typically an infringement on a person or business’s personal or intellectual rights. It can include libel, slander, and copyright infringement.
PERSONAL ARTICLES FLOATER Provides all risk coverage, subject to reasonable exclusions for valuable items such as furs, jewelry, cameras, silverware, etc. formerly insured under separate contracts. The items are generally listed by description and value. This can be contrasted to the personal effects floater.
PERSONAL EFFECTS FLOATER An inland Marine policy covering world-wide except in the insured's domicile, personal effects usually carried by a tourist. In two forms, "All Risk" or Broad Form and "Specified Perils" form.
PERSONAL INJURY Injury other than bodily injury arising out of false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander, or violation of a person's right to privacy committed other than in the course of advertising, publishing, broadcasting or telecasting. Contrast with Advertising Injury.
PERSONAL PROPERTY Any property of an insured other than real property. Homeowner policies protect the personal property of family members, and commercial forms are used to protect many types of business personal property of an insured.
PERSONAL PROPERTY FLOATER A broad policy covering all personal property world-wide, including insured's domicile.
PHYSICAL DAMAGE A generic term indicating actual damage to property.
PHYSICAL HAZARD The material, structural, or operational features of the risk itself, apart from the morale or moral hazards of the persons owning or managing it.
PILFERAGE Petty theft, especially theft of articles in less than package lots.
POLICY Legal document issued to the insured setting out the terms of the contract of insurance.
POLICY EXPIRATION DATE The date when your current insurance policy expires. This date can be found on your current Declaration (or "DEC") page, insurance identification card, or recent cancellation notice. This date is not to be confused with the date of your next payment or the date when your renewal payment is due.
POLICY LIMIT The maximum amount a policy will pay, either overall or under a particular coverage.
POLICY PERIOD (OR TERM) The period during which the policy contract provides protection, e.g., six months or one or three years.
POLICYHOLDER The person (or persons) whose risk of financial loss from an insured peril is protected by the policy.
PRO-RATA CANCELLATION is a method of an insurance policy with the return of all unearned premium and without any fee or penalty for interim cancellation. This is often the procedure followed when the cancellation is initiated by the insurer.
PREFERRED RISK An insurance classification indicating a risk that is superior to the average risk on which the rate has been calculated and thus eligible for a reduced rate.
PREMISES The particular location of property or a portion thereof as designated in a policy.
PREMIUM The amount of money an insurance company charges for insurance coverage.
PRIMARY RESIDENCE The place where you will reside for the majority of your policy term.
PROFESSIONAL LIABILITY INSURANCE Liability insurance to indemnify professionals, doctors, lawyers, architects, etc. for loss or expense resulting from claim on account of bodily injuries because of any malpractice, error, or mistake committed or alleged to have been committed by the insured in his profession.
PROHIBITED RISK Any class of business which an insurance company will not insure under any condition.
PROOF OF LOSS A formal statement made by the insured to the insurance company regarding a loss. The purpose of the proof of loss is to place before the company sufficient information concerning the loss to enable it to determine its liability under the policy.
PROPERTY DAMAGE LIABILITY Pays when an insured person is legally liable for damage to the property of others caused by your vehicle or your operation of most non-owned vehicles. This coverage also pays for your legal defence costs if you are sued.
PROPERTY DAMAGE UNINSURED MOTORIST Property damage uninsured or underinsured coverage protects you in situations where your vehicle has been wrecked by another driver who doesn't have adequate coverage or no insurance at all, and can't pay for your losses. With this coverage, your own insurance company would pay up to the limit of your policy, to have your car fixed or replaced.
PROPERTY INSURANCE Property Insurance indemnifies an insured whose property is stolen, damaged, or destroyed by a covered peril. The term property insurance includes direct or indirect property losses covered in several lines of insurance.
PROTECTION (1) Term used interchangeably with the word "coverage" to denote the insurance provided under the terms of a policy. (2) Term used to indicate the existence of fire-fighting facilities in an area known as a "protected" area.
Back To TopQUALIFYING EVENT A qualifying event is any change in your business situation that affects your needs for insurance.
QUOTE An estimate of the cost of insurance, based on information supplied to the insurance company by the applicant.
Back To TopRATE The per unit cost of insurance. (See also Premium).
RATED Usually used in combination, rated-up or rated policy. A policy issued with an extra premium charge REIMBURSEMENT Payment of an amount of money related to the amount of the loss to or on behalf of the insured upon the occurrence of a defined loss.
REINSTATEMENT Restoring a lapsed policy back in force. The reinstatement may be effective after the cancellation date, creating a lapse of coverage. Some companies require evidence of insurability and payment of past due premiums plus interest.
REINSURANCE (1) A contract of indemnity against liability by which the insurance company procures another insurance to insure it against loss or liability by reason of the original insurance. (2) Insurance by one insurance company of all or part of a risk accepted by it with another insurance company which agrees to reimburse the insurance company for the portion of the claim reinsured. The insurance company obtaining the reinsurance is called the "ceding insurance company;" the insurance company issuing the reinsurance is called the "reinsurer." A reinsurer may, in turn, seek reinsurance on some portion of the risk it has reinsured, a process known as "retrocession."
RENEWAL The continuation in full force and effect of something that is about to expire. With an insurance policy it is made either by the issuance of a new policy or renewal receipt or certificate, to take effect upon the expiration of the old policy.
REPLACEMENT COST The cost of replacing property without deduction for depreciation.
RETROACTIVE DATE A retroactive date defines how far back in time a loss can occur for your policy to cover your claim. If a claim happens prior to your retroactive date, your policy won’t provide benefits. It’s a feature of claims-made professional liability or errors and omissions insurance.
RIDER Usually known as an endorsement, a rider is an amendment to the policy used to add or delete coverage.
RISK (1) A chance of loss. (2) A person or thing insured. (Impaired or substandard risk: An applicant whose physical condition or moral habits do not meet the standard on which the rate is based).
RISK MANAGEMENT Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through such practices as avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance.
ROBBERY The felonious taking, either by force or by fear of force, of the personal property of another, commonly known as "hold-up.
Back To TopSETTLEMENT Usually, a policy benefit or claim payment. It connotes an agreement between both parties to the policy contract as to the amount and method of payment.
SHORT-RATE CANCELLATION is a cancellation method of an insurance policy used when the cancellation is initiated by the insured during the policy term. The refund to the insured for the unearned premium is calculated taking into account the inclusion of a service/administration fee
SPECIFIED PERILS An optional coverage designed to provide basic protection for your vehicle for loss or damage resulting from incidents specifically stated in your policy. A few examples of the types of losses insured under named perils coverage include fire, lightning, theft, explosion, earthquake, windstorm and hail. This coverage is optional and may be purchased in addition to the mandatory coverages required by law, and it is subject to a deductible.
STANDARD OF CARE refers to a professional's duty to act reasonably and provide quality services. If you fall short of the standard of care, a client usually has the right to sue.
STRICT LIABILITY is the responsibility that small business owners have for damages or injuries their products cause, even if they did nothing wrong.
SUBROGATION The right of an insurance company to step into the shoes of the party whom they compensate and sue any party whom the compensated party could have sued.
SUPPLEMENTAL COVERAGES is additional conditions amending Property and Business Interruption coverages to the extent that a coverage to be applied and an amount of coverage available have been specified in the Declarations pages
Back To TopTAIL COVERAGE Tail coverage is an addition to a claims-made policy. It extends coverage for incidents that happened during the time you had your policy, but a claim was not filed until after your policy expired or was canceled. Tail coverage is another name for an extended reporting period.
THEFT Any act of stealing. Theft includes larceny, burglary and robbery.
THIRD PARTY INSURANCE Protection of the insured against liability for damage to or destruction of the bodies or property of others.
TORT A tort is a wrongful act that harms a third party, either an individual or a business.
TOTAL LOSS A loss of sufficient size so that it can be said there is nothing left of value. The complete destruction of the property. The term is also used to mean a loss requiring the maximum amount a policy will pay.
TRANSFER OF RISK Shifting all or part of a risk to another party. Insurance is the most common method of risk transfer, but other devices, such as hold harmless agreements, also transfer risk. One of the four major risk management techniques. See Risk Management.
Back To TopUMBRELLA INSURANCE is defined as a form of insurance that provides extra protection against lawsuits filed against you for alleged property damage or personal injuries.
UNDERWRITER (1) A person trained in evaluating risks and determining the rates and coverages that will be used for them. (2) An agent, especially a life insurance agent, who might qualify as a "field underwriter." In theory, the agent is supposed to do some underwriting before submitting the case to the home office underwriter; i.e., to make a decision on the basis of facts known to him on whether or not the risk is sound and to report all facts known to him that might affect the risk.
UNDERWRITING The process of evaluating a risk for the purpose of issuing insurance coverage on it.
Back To TopVANDALISM Used synonymously with malicious mischief; willful physical damage to property.
VALUATION Estimation of the value of an item, usually by appraisal.
VICARIOUS LIABILITY is when you or your business are held financially responsible for the actions of another person or party. Most commonly, this is the legal framework at play when you are sued over mistakes made by your contractors, employees, or agents.
Back To TopWAIVER (1) A rider waiving (excluding) liability for a stated cause of accident or (especially) sickness. (2) A provision or rider agreeing to waive (forego) premium payment during a period of disability. (3) The giving up or surrender of a right or privilege that is known to exist. It may be effected by the agent, adjuster, or insurance company employee or official orally or in writing.
Water Damage Extension (Sewer Backup) Coverage This provides protection against damage caused by back up of water from a sewer, sump, septic tank, eavestrough, downspout or drain. This is an extremely important additional coverage to consider, given: