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Insurance Glossary

A
Abandonment Clause -- A clause often contained in property insurance policies stating that the insured cannot abandon damaged property to the insurer and demand to be reimbursed for its full value.
Accident -- A sudden fortuitous event.
Accounts Receivable Coverage Form -- An Inland Marine Coverage form which insures against loss the insured suffers because of an inability to collect from customers when accounts receivable records are damaged.
Actual Cash Value (ACV) -- The cost to replace an item of property at the time of loss, less an allowance for depreciation. Often used to determine amount of reimbursement for a loss (Replacement Cost minus Depreciation).
Admitted Aircraft Liability Coverage -- A coverage sometimes written in conjunction with Aircraft Passenger Liability which can provide reimbursement for death or dismemberment without requiring legal action.
Aggregate Limit -- A type of policy limit found in liability policies which limits coverage to a specified total amount for all losses occurring within the policy period.
Agreed Value -- Written with property insurance policies. It waives the Coinsurance clause and requires the insured to carry insurance equal to at least 80% of a signed statement of values filed with the company.
Aircraft Hull Insurance -- Physical damage insurance provided to cover loss or damaged to an insured aircraft, in motion, not in motion or both.
Aircraft Liability Insurance -- Coverage written to cover public and passenger liability and property damage liability.
Airport and Air Meet Liability -- Coverage that provides protection to airports for bodily injury and property damage liability.
Allied Lines -- Property coverages which are closely associated and frequently sold with fire insurance: Dwelling insurance, Earthquake insurance, Sprinkler Leakage, etc.
All Risk Insurance -- Better known as "open perils" insurance, it is insurance protecting the insured from loss arising from any peril other than those perils specifically excluded by name. This contrasts with Named Peril insurance, which names the peril or perils insured against.
Annual Transit Policy -- Inland Marine transportation insurance which insures a property owner for goods being transported.
Appraisal Clause -- Clause which provides an appraisal procedure when the insured and the insurer are in disagreement regarding the amount of a loss. Insured and insurer each choose an appraiser, who, failing to agree, select an umpire. Agreement of any two of the three will be decisive.
Assignment Clause -- A condition in insurance policies that specifies that transferring the policy to another is not valid unless the company consents to it in writing.
Automobile Mechanical Breakdown Insurance -- Coverage designed to indemnify against the costs of mechanical failures or breakdowns not covered under the dealer's or manufacturer's warranty.
Aviation Insurance -- Insurance which provides both liability and physical damage (also called Aircraft Hull Insurance) coverage for aircraft. Liability coverage available separately for hangarkeepers and airport owners or operators.

B
Bail Bond -- Surety bond that guarantees that the principal will appear in a criminal proceeding. See Court bond.
Bailee -- One who has temporary custody of property belonging to another. (Example: dry cleaners.)
Bailees Policy -- Inland Marine insurance obtained by a bailee, to cover loss or damage to customers' property in the bailee's custody, without regard to liability.
Barratry -- Illegal acts committed willfully by a ship's master or crew for the purpose of damaging the ship or cargo. This Ocean Marine peril includes hijacking, abandonment, and embezzling of the cargo.
Bid Bonds -- A type of Contract bond which guarantees the obligee that if a contractor's bid is accepted, the contractor will provide the required Performance bond. See also Contract bond.
Binder -- An oral or written statement providing immediate insurance protection, valid for a specified period. Designed to provide temporary coverage until a policy can be issued or denied.
Blanket Insurance -- Insurance where a single amount of insurance applies to two or more coverage items. Contrast Specific insurance. Also a type of Employee Dishonesty coverage that covers loss caused by any employee. Contrast Name Schedule coverage and Position Schedule coverage.
Blue Sky Bond -- Surety bond required of investment companies, guaranteeing against misrepresentation of securities and defrauding the public.
Bodily Injury -- Usually defined to include physical harm, sickness, disease, or death resulting from any of these. Boiler and Machinery Coverage Form -- Insurance which covers the insured against loss (liability and physical damage) arising out of the use of steam boilers or other machinery. Part of the Commercial Package Policy.
Builders Risk Coverage Form -- Insurance that provides coverage for buildings under construction as well as equipment to service the building, owned materials and supplies, and temporary structures used in construction. Part of the Commercial Property portion of the Commercial Package Policy.
Building and Personal Property Coverage Form -- The primary coverage form of the Commercial Package Policy's Commercial Property Coverage part. Covers a business's buildings, business personal property, and the personal property of others.
Burglary -- As it is defined in Crime insurance policies, the taking of property by a person unlawfully entering or leaving the premises, as evidenced by visible signs of forced entry or exit.
Business Auto Coverage Form -- A form which is part of the Commercial Auto Coverages and is designed to cover the auto exposures of businesses, other than truckers or garages.
Business Income Form -- A coverage which reimburses the insured for loss of earning due to an interruption in operations caused by a covered peril; available with or without extra expense. One of the Commercial Property forms available as part of the Commercial Package Policy.
Business Pursuits Endorsement -- An endorsement to a Homeowners policy which provides coverage against occupational liabilities for those who are employed by others.
Businessowners Policy -- A multi-peril, multi-line package policy designed to provide broad property and casualty coverages for small businesses.

C
Camera and Musical Instrument Dealers Form -- An all-risk Inland Marine dealers form that covers stocks of merchandise at the insured's premises, in transit, away in an employee's custody or elsewhere.
Cargo Liability Coverage -- Protects against legal liability for loss or damage to cargo or baggage. May be part of an Ocean Marine or Aviation policy.
Casualty Insurance -- A line of insurance which historically has included a wide variety of unrelated coverages other than Life and Health. One important coverage in the casualty line is Liability. Casualty also includes Aviation, Auto, Boiler and Machinery, Crime, Workers Compensation and Surety Bonds.
Causes of Loss Form -- A form which is a part of the Commercial Property Coverage part of the Commercial Package Policy. It specifies which perils are insured against and lists exclusions. Several different versions provide increasingly broad coverage from Basic to Broad to Special. An earthquake form is also available.
Claim -- The assertion of a legal right against an insurer, that carriers with it a demand for appropriate relief.
Claims-Made Form -- A liability form which is part of the Commercial General Liability part of the Commercial Package Policy. Covers bodily injury and property damage which occurs on or after the retroactive date, if any, and for which a claim is first made during the policy period.
Coinsurance Clause -- A clause that requires an insured to pay part of the loss if the coverage provided under the policy limits is less than a specified percentage of the value of the property at the time of loss. Collision -- A type of physical damage insurance which covers loss due to the insured object striking another object. Collision may also include upset of the insured object.
Commercial Articles Coverage Form -- Part of the Inland Marine Coverage part of the Commercial Package Policy. Provides all risk coverage for photographic equipment and musical instruments on either a scheduled or blanket basis or both.
Commercial Package Policy -- A simplified, easy-to-read Commercial Package Policy introduced by ISO (Insurance Services Office). Includes General Liability, Commercial Property, Commercial Inland Marine, Commercial Crime / Employee Dishonesty, Boiler and Machinery, Commercial Auto, Farm, Liquor Liability, Pollution Liability, Professional Liability, and Employment Related Practices Liability. Forms may be used in the package policy or may be used to issue monoline policies.
Common Policy Conditions -- A form containing conditions that apply to all coverages issued under the Commercial Package Policy program.
Comprehensive Coverage -- In automobile insurance, a broad physical damage coverage which covers all property losses except collision and those perils or property which are specifically excluded. Computer Fraud Coverage Form -- A form which is part of the Commercial Computer Crime Coverage part of the Commercial Package Policy. It covers loss of all types of property by theft related to the use of computers to fraudulently cause a transfer of property from inside the insured's or a banking premises.
Concealment -- The withholding of a material fact from the insurance company. May void the policy.
Conditionally Renewable -- A type of health insurance cancellation clause that states the insurer can refuse to renew the policy only under certain conditions stated in the policy.
Conditions -- The portion of an insurance contract which sets forth the rights and duties of the insured and the insurance company.
Condominium Association Coverage Form -- A part of the Commercial Property Coverage part of the Commercial Package Policy which covers the buildings in a condominium complex (not the unit-owner's personal property).
Condominium Commercial Unit-Owners Coverage Form -- A part of the Commercial Property Coverage part of the Commercial Package Policy which overs the unit-owner's business personal property.
Consequential Damage -- Damage which occurs as "consequence" of a direct loss, such as loss from spoilage resulting from lack of power, light, heat, etc. Not generally covered under property policies unless specified.
Conservation Bond -- Fiduciary bond for those appointed to manage and preserve property other than estates of decedents.
Constructive Total Loss -- In Ocean Marine insurance, a loss which occurs when property is not completely destroyed but the cost to salvage or repair the property would exceed its value.
Contingent Liability -- Liability which an insured or business incurs because of the actions of others (i.e. family or employees). Also called vicarious liability.
Contract -- A legal agreement between two parties promising a certain performance in exchange for a certain consideration.
Contract Bond -- A category of Surety bonds which guarantees the fulfillment of contractual obligations. Includes Bid bonds, Labor and Materials bonds, Performance bonds, Payment bonds, and Supply Contract bonds.
Contractors Equipment Coverage Form -- Part of the Inland Marine Coverage part of the Commercial Package Policy. It covers various types of contractors mobile equipment needed to conduct business.
Contractual Liability -- Liability rising out of an insured's contractual obligations. Excluded in the Commercial General Liability policy, subject to several exceptions.
Controlled Lines -- Classes of Inland Marine coverage for which standardized forms have been prepared as part of the Commercial Package Policy. Contrast uncontrolled lines.
Court Bond -- A category of judicial bonds required for most types of court litigation: civil suits, criminal actions, appeals, bail bonds, etc. (Includes Bail bonds and Litigation bonds)
Coverage Trigger -- The event which triggers coverage under a Commercial General Liability Coverage form. Under the Occurrence form, the coverage trigger is bodily injury or property damage which occurs during the policy period, regardless of any later time at which a claim is made. Under the Claims-Made form, the trigger is BI or PD which occurs on or after the retroactive date and for which claim is made during the policy period. Crime
Coverage Plans -- Various groups of Crime Coverage forms designed to provide a package of crime insurance to meet the insured's needs.
Customs Bond -- A Surety bond that may be required of those associated with import or export activities, to guarantee that the required customs will be collected, reported, and paid.

D
Dealers Drive-Away Collision -- A coverage which can be added onto the Garage policy by endorsement. It eliminates the Physical Damage exclusion regarding coverage for autos being driven or transported from point of purchase or distribution to destination, if such points are more than 50 miles apart.
Debris Removal -- A coverage provided in many property contacts which reimburses the insured for expenses involved in removing debris produced by a loss from a peril insured against.
Declarations -- The section of an insurance contract which shows who is insured, what property or risk is covered, when and where coverage is effective, and how much coverage applies.
Deductible -- Usually, a dollar amount the insured must pay on each loss to which the deductible applies. The insurance company pays the remainder of each covered loss up to the policy limits. See also Franchise, Percentage, and Straight Deductibles.
Direct Loss -- Loss which is a direct result of a peril. Also includes loss due to efforts to end the peril or to unavoidable exposure following a peril.
Disability Insurance -- Line of insurance which includes coverages that are designed to protect the insured against a loss of income resulting from injury or sickness.
Discovery Period -- A period of time, in Crime insurance, during which losses that occurred during the policy period but are discovered within one year of expiration will be covered.
Double Indemnity -- A Health policy provision that doubles death benefits otherwise applicable for accidents under specified circumstances.
Dread Disease Policy -- A Health insurance policy which provides benefits for a single illness.
Drive Other Car Coverage -- An endorsement to the Business Auto Policy which covers named persons for nonbusiness use of autos they do not own. Used when the named insured furnishes an auto to another, such as an employee, who does not own his or her own car.
Dwelling Policy -- An allied lines policy which provides coverage for the dwellings and personal property of individuals and families against fire and additional perils.

E
Earthquake Coverage -- Available under the Commercial Package Policy. Requires the Causes of Loss form -- Earthquake.
Electronic Data Processing Coverage -- Inland Marine insurance designed to cover computer hardware and software.
Employee Dishonesty Coverage Form -- Part of the Commercial Crime Coverage part of the Commercial Package Policy, it covers loss resulting from dishonest acts of employees. This coverage is excluded under other Crime insurance forms. Formerly this coverage was provided under Fidelity bonds or combination policies that included Fidelity bonds.
Employers Liability Coverage -- Coverage provided under a Workers Compensation policy to cover the employer's liability arising out of employees' work-related injuries.
Endorsement -- A document which is attached to the policy and modifies or changes the original policy in some way.
Equal Shares Clause -- An insurance clause which states that when the insured has other insurance, the loss payment made by the company will be based on the number of applicable policies, not on their limits.
Equipment Dealers Coverage Form -- An Inland Marine form which provides all-risk coverage for mobile agricultural and construction equipment owned by or in the care of an equipment dealer.
Exemplary Damages -- Damages awarded to make an example of the wrongdoer.
Excess Coverage -- Coverage which applies only after limits of primary insurance have been exhausted. See Primary Insurance.
Exclusions -- Section of the insurance policy which lists property, perils, persons, or situations which are not covered under the policy.
Expediting Expenses -- A Boiler and Machinery coverage that covers the cost of temporary repairs and the costs of speeding up permanent repairs, i.e. overtime, or express transportation charges.
Extended Nonowned Coverage Endorsement -- A Personal Auto Policy endorsement that extends liability coverage to named individuals for a nonowned automobile which is furnished for their regular use.
Extended Reporting Period -- A period of time provided by the Claims-Made Commercial General Liability coverage form during which coverage will be provided for claims made beyond the expiration date of the policy if the coverage part is 1) cancelled or not renewed or 2) if the insurer renews or replaces the Coverage part with insurance that has a retroactive date later than the date shown in the Declarations, or with an Occurrence form. The Basic ERP runs five years. The Supplemental ERP has unlimited duration but is available only by endorsement for an extra charge.
Extortion Coverage Form -- A Commercial Crime form that covers all types of property when surrendered away from the premises as a result of a threat to do bodily harm to the insured or employee, or an invitee of either, while they are being held captive, or allegedly being held captive.
Extra Expense Coverage Form -- Covers additional expenses incurred by the insured business to continue operations following a direct loss by a peril insured against. One of the Commercial Property Coverage forms that can be included in a Commercial Package Policy.

F
False Pretense Coverage -- Coverage that can be added onto a Garage policy by endorsement to insure a dealer against loss from voluntarily parting with a covered auto by trick or scheme or from acquiring an auto from someone who does not have legal title.
Farm Coverage Part -- Part of the Commercial Package Policy, the Farm Coverage Part provides both property and liability forms that can be used to provide farm coverage on either a monoline or package basis.
Farm Liability Coverage Form -- A form that is a part of the Farm Coverage Part and is designed to provide liability coverage for farm operations.
Farm Property Coverage Form -- A form that is part of the Farm Coverage Part and provides seven separate property coverages designed specifically for farms.
Fidelity Bond -- A class of bonds which guarantees an employee's honesty. Today this coverage is generally provided through Employee Dishonesty insurance.
Fiduciary -- A person or institution which has responsibility for the money, property, or financial affairs of another.
Fiduciary Bond -- A Judicial bond commonly used to bond fiduciaries: guardians, administrators, trustees, and executors, or persons appointed by the court to manage the property of others. See Judicial bond.
Film Coverage Form -- An Inland Marine Coverage form that provides all-risk coverage for exposed motion picture film, including sound recordings and magnetic or video tapes that have been properly recorded until the first full quota of positive prints or film have been made.
Financial Responsibility Law -- State law which requires owners or operators of autos to provide evidence that they have the funds to pay for automobile losses for which they might become liable. Insurance is the usual method for providing this evidence to the state.
Floor Plan Coverage Form -- An Inland Marine Coverage form that provides all-risk coverage for merchandise for sale that has been financed.
Florida Automobile Joint Underwriting Association -- A market source for persons who are unable to purchase Auto insurance through normal channels. It is a syndicate of all licensed companies in Florida that write Auto insurance, with direct operations performed in their behalf by a group of servicing carriers.
Forgery or Alteration Coverage Form -- A Commercial Crime form that covers loss from forgery or alteration of checks, drafts, promissory notes, or similar instruments.
Franchise Bond -- A Surety bond that may be required by a public body when it awards a franchise.
Franchise Deductible -- A deductible that specifies that no payment will be made until loss equals or exceeds a prescribed amount; then the loss is paid in full.
Fraud -- A false statement intended to deceive the insurer and induce it to part with something of value or surrender a legal right. May void a policy.
Freight Coverage -- An Ocean Marine coverage that provides protection for the vessel owner in the event that freight charges are not paid.

G

Garage Coverage form -- A coverage form that is part of the Commercial Auto Coverage Part and which provides coverage for garage businesses (dealers, service stations, garages, parking lots, etc.). Includes coverage for liability, physical damage and garagekeepers losses arising out of owned, nonowned, and hired autos. Garagekeepers Liability -- A coverage which is part of the Garage coverage form. Covers a garage risk's legal liability for customers' autos in the care, custody, or control of the garage. At the insured's option, can also apply without regard to fault, for an additional premium.
General Average -- An Ocean Marine term used to indicate a partial loss resulting from a sacrifice of cargo to save remaining property (jettison). Each party shares in the loss in proportion to their total interest in property being transported.
General Liability -- A category of insurance which includes most of a business's liability exposures. Exposures covered include premises and operations, products and completed operations, contractual liability, and contingent liability.
Grace Period -- In Health insurance, a period during which the policy will remain in force, if unpaid by the premium due date. Florida law specifies the required length of the grace period.
Guaranteed Renewable -- A Health insurance policy provision that states that the insurer must renew the policy to a certain age. While the company cannot fail to renew the policy until the specified age, it can increase the premium.

H
Hangarkeepers Liability -- A form of aviation bailee insurance that covers the insured's liability for damage to aircraft stored for safekeeping.
Hazard -- Something that increases the chance of loss. For instance, faulty wiring is a hazard because it increases the chance of a fire loss.
Health Insurance -- Insurance of human beings against bodily injury, disablement, or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness, and every insurance appertaining thereto.
Health Maintenance Organization -- A noninsurance alternative to dealing with the risks of health care costs. An HMO provides comprehensive health services to its members for a prepaid fixed fee, equivalent to an insurance premium.
HMO -- See Health Maintenance Organization.
Homeowners Policy -- A personal multiple line contract incorporating both property and liability coverages. Several different forms provide varying degrees of protection.
Hospital Indemnity Insurance -- Health insurance that pays a flat amount per day of hospitalization, regardless of expenses or other insurance. Its primary purpose is to supplement other coverage which may be inadequate due to rising costs.
Hospitalization Expense Insurance -- Health insurance designed to indemnify the insured for basic hospitalization expenses of room and board in the hospital, nursing care, lab fees, operating room, medical supplies, and related items.
Hull Insurance -- In Ocean Marine and Aviation insurance, insurance against physical damage to plane or ship.

I
Improvements and Betterments -- Permanent alterations which a tenant makes to the rented property which will not be removed when the tenant leaves.
Indemnitor -- In a Surety agreement, one who agrees to reimburse the surety for any loss it may suffer from having bonded the principal.
Indemnity -- A principle of insurance which provides that when a loss occurs, the insured should be restored to the approximate financial condition occupied before the loss occurred, no better, no worse.
Indemnity Bond -- A License bond which holds the government harmless from injuries or damages caused by the principal's activities.
Indirect Loss -- Loss which is a result or consequence of a direct loss.
Inflation Guard -- A property insurance option which provides that the policy limits will increase a certain percentage at regular intervals, for instance, annually.
Inland Marine Insurance -- A form of insurance originally designed as an extension of Ocean Marine coverage to insure transportation of goods over land. Today, it covers, in addition to goods in transit, a variety of portable property.
Insolvency Bond -- Fiduciary bonds that are required of persons appointed to conserve remaining assets and protect creditors.
Installation Form -- An uncontrolled Inland Marine form that covers property in transit and at premises where an installation is to be made.
Installment Sales Floater -- An Inland Marine form which covers property sold on an installment basis. Instrumentalities of Transportation and Communication -- A category of Inland Marine insurance covering such property as bridges, tunnels, pipelines, etc.
Insurable Interest -- Any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment. A claim may be paid only when an insurable interest exists.
Insurance -- A contract whereby one undertakes to indemnify another or pay or allow a specified amount of a determinable benefit upon determinable contingencies.
Insurance Service Office (ISO) -- An organization made up of member companies, which collects and analyzes statistics collected from members and then establishes and files standard rates for many lines of insurance. Also develops standardized forms.
Insuring Agreement -- The section of an insurance policy which states which losses will be indemnified, what property is covered, which perils are insured against.

J
Jettison -- A voluntary action to rid the ship of cargo in order to prevent further damage or peril.
Jewelers Block -- An all-risk Inland Marine form for retail jewelers that covers the insured's stock in trade and the property of others, while at the insured's premises, in transit, and elsewhere.
Judicial Bond and Bonds Required by Courts -- See Fiduciary Bonds and Court Bonds.

L
Labor and Materials Bond -- See Payment Bond.
Leasehold Interest Coverage Form -- A form which belongs to the Commercial Property Coverage part of the Commercial Package Policy. It covers a tenant for certain losses following damage to the premises from a covered peril, such as tenant's loss of a favorable lease or loss of remaining value of improvements or betterments made by a tenant.
Legal Liability -- Rules of law dictate that a person must pay for damages done to another.
Legal Liability Coverage Form -- This form belongs to the Commercial Property Coverage part of the Commercial Package Policy. It covers the insured for negligently damaging property owned by others, but in the insured's care, custody, or control.
Liability Insurance -- Insures the individual for financial losses which arise out of the person's responsibilities to others imposed by law or contract.
Liberalization Clause -- A policy condition found in many standard policies which states that if the insurer adopts a revision that would broaden coverage without additional premium within some period of time prior to the policy period or during the policy period, the insured receives the benefit of such broadened coverage.
License and Permit Bonds -- A category of Surety bonds which covers a wide variety of occupations and operations, and which are often required as a condition of doing business.
Limits of Liability -- The maximum amount of insurance the insurance company will pay for a particular loss, or for a loss during a period of time.
Liquor Liability Coverage -- This form belongs to the Commercial General Liability coverage part of the Commercial Package Policy. It covers liquor liability which is excluded from the standard CGL forms for those who are in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages.
Litigation Bond -- See Court bond.
Loss of Use Coverage -- Under the Homeowners contract, covers the insured's increased cost of living after loss and rental value of any portion of the dwelling which is rented out.
Lost Instrument Bonds -- A category of Surety bonds issued in situations where a principal loses valuable securities or other papers and requests issuance of duplicates. Should the lost instruments turn up and be redeemed by the holder, the issuer of the instrument would be reimbursed.

M
Mail Coverage Form -- A part of the Commercial Inland Marine Coverage part of the Commercial Package Policy. It provides all-risk coverage for valuable contents of mail.
Major Medical Insurance -- A type of Health insurance intended to provide protection against catastrophic losses. Some forms are designed to complement or supplement basic hospital / surgical insurance; others provide both basic and catastrophic illness coverage.
Marine Insurance -- A form of insurance primarily designed to cover property in transport over land or sea.
Medicare Supplement Insurance -- A type of Health insurance designed to cover medical costs not payable under the federal Medicare program.
Miscellaneous Type Vehicle Endorsement -- An endorsement which may be added to the Personal Auto Policy to cover motorcycles, motor homes, golf carts, mopeds, and other recreational vehicles.
Misrepresentation -- Statement of something that is known to be untrue.
Mortgagee Rights -- Rights granted to a mortgagee, under a property contract issued to a mortgagor, by virtue of the mortgagee's financial interest in the property.
Motor Truck Cargo Policy -- Inland Marine transportation insurance which protects the carrier against its liability for damage to domestic shipments in its custody.

N
Name Schedule Coverage -- A type of Employee Dishonesty insurance that covers loss only from named employees.
Named Nonowner Coverage -- An endorsement that can be added to the Personal Auto Policy to provide coverage for a named individual who does not own an auto while the insured is operating autos owned by others.
Negligence -- The failure to exercise that degree of care that the law requires to protect others from an unreasonable risk of harm. The failure to act as a prudent person would have acted under similar circumstances.
No-Fault Insurance -- See Personal Injury Protection.
Noncancelable -- A type of Health insurance policy which the company may not cancel, but must renew to a certain age with no change in premium. Affords the greatest degree of continuation protection to the insured.
Nuclear Energy Liability Exclusion Endorsement -- A mandatory endorsement which must be included with the Commercial General Liability coverage part of the Commercial Package Policy. In general, it excludes all hazards related to nuclear energy.

O
Objects Definition Form -- Part of the Boiler and Machinery Coverage part of the Commercial Package Policy. Defines the objects covered by the Boiler and Machinery Coverage form in great detail.
Obligee -- In bonds, the one who is to be guaranteed that the principal will perform.
Occurrence -- In Liability policies, generally defined to be an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
Occurrence Form -- A Commercial General Liability Coverage form with a coverage trigger that states that coverage applies only to bodily injury or property damage which occur during the policy period, regardless of when claim is made.
Ocean Marine Insurance -- Marine insurance designed to provide broad coverage for cargo and ships in transit over sea. Includes Cargo insurance, Hull insurance, Freight and Liability coverage (Protection and Indemnity).
Optionally Renewable -- A type of Health insurance coverage that cannot be cancelled during the policy term, but for which the company reserves the right to nonrenew the policy at expiration.
Owners and Contractors Protective Liability -- A form of Liability insurance which protects an owner or general contractor against liability arising out of the acts of independent contractors or subcontractors. May be issued to the independent contractor or subcontractor, or may be issued directly to the owner or general contractor.

P
Particular Average -- In Ocean Marine insurance, a partial loss which is not part of a general sacrifice of property (general average).
Payment Bond -- A type of Contract bond which guarantees that bills for labor and materials will be paid by the contractor upon completion of the work. Also called Labor and Materials bond. See Contract bonds.
Peak Season Endorsement -- A Commercial Property endorsement which provides for higher limits to apply during specific periods of the year when inventory is at a peak.
Penalty -- The amount of a bond.
Percentage Deductible -- A deductible which requires a deduction from the loss of a percentage of the value of the property or a percentage of the policy limits.
Performance Bonds -- Contract bonds which guarantee that jobs will be completed by the contractor according to contract specifications.
Peril -- The cause of loss. Examples include fire, windstorm, or explosion.
Perils of the Sea -- Unique perils to which property in transit by water is exposed. Includes unusual action of wind or waves, stranding, lightning, collision, and sinking.
Personal and Advertising Injury -- Coverage provided under Liability policies which provides coverage against liability for libel, slander, violation of privacy, misappropriation of advertising ideas, or infringement of copyright, title, or slogan.
Personal Articles Floater -- Personal Inland Marine insurance which provides all-risk coverage on nine operational classes of personal property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections, and coin collections.
Personal Auto Policy -- Easy-to-read auto policy which provides broad coverage for both owned and nonowned autos, used, maintained, or operated by the insured and family.
Personal Effects Floater -- Provides all-risk coverage for individuals and families who desire to insure their personal belongings (baggage) while traveling or vacationing.
Personal Injury Protection -- A coverage provided in Auto policies in the state of Florida that provides coverage for the insured's own injuries on a first-party basis, without regard to fault. This is a required coverage and must be carried by all owners of motor vehicles in Florida.
Personal Liability Policy -- Provides broad coverage for an individual's or family's liability exposure for bodily injury or property damage. Similar to coverage included in Homeowners contract.
Personal Property Floater -- Personal Inland Marine floater which provides all-risk coverage on unscheduled personal property.
Physical Damage -- In auto insurance, damage or loss to the insured's own autos or autos in the insured's care, custody, or control.
Physicians and Surgeons Equipment Coverage Form -- Part of the Commercial Inland Marine Coverage part of the Commercial Package Policy. It covers insureds in the medical and dental professions for loss to medical, surgical, and dental equipment, furniture, fixtures, and improvements or betterments.
Physicians Coverage -- A type of Health insurance that reimburses the insured for nonsurgical care provided by a physician.
Policy -- An insurance contract.
Pollution Liability Coverage -- A form of liability insurance that can be added to the CGL section of the Commercial Package policy to provide limited coverage for pollution.
Position Schedule Coverage -- A form of Employee Dishonesty insurance which covers only people who fill positions named in the policy.
Premises Burglary Coverage Form -- One of the Commercial Crime Coverage forms which are a part of the Commercial Package policy. Provides coverage for property other than money and securities if caused by burglary or attempted burglary or robbery of a watchperson. Premises Theft and Robbery Outside the
Premises Coverage -- One of the Commercial Crime Coverage forms which are a part of the Commercial Package policy. Covers property other than money and securities against any act of stealing from within the premises and robbery outside the premises.
Preservation of Property -- This is a Property insurance coverage, sometimes known as a removal, which provides coverage for property that has been removed from the premises to protect it following a covered loss.
Primary Insurance -- When two or more coverages or policies apply to the same loss, the one which pays first, up to its limit of liability or the amount of the loss, whichever is less. See Excess insurance.
Principal -- In bonds, the party who promises to do (or not to do) a specific thing.
Private Passenger Autos -- Ordinary cars, station wagons and jeeps, utility autos, (pickups, panel trucks, and delivery vans of 1,500 lbs or less, not used commercially) and utility trailers designed to be pulled by a private passenger auto.
Probate Bond -- Fiduciary bond dealing with those who administer estates of a deceased person.
Products and Completed Operations -- A form of insurance which covers a company against liability arising out of its products or completed operations. Included in CGL forms or may be purchased separately.
Professional Liability -- Liability arising out of the rendering or failure to render services of a professional nature. Proof of Loss -- 1) The evidence offered by the insured to prove entitlement to collect the amount claimed from the insurer. 2) The statement, signed and sworn by the insured, setting forth the claim information required by the policy.
Property Damage -- A type of loss covered under many liability contracts. Property damage means physical injury to tangible property, including loss of use.
Protection and Indemnity -- In Ocean Marine insurance, a form of liability insurance.
Proximate Cause -- A fundamental doctrine in property insurance that holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resulting damage is a part of the occurrence.
Public Official Bonds -- A category of Surety bonds furnished by principals who are elected or appointed to fill positions of trust, guaranteeing their faithful and honest performance in office.
Punitive Damages -- Damages that punish the wrongdoer for anti-social actions, rather than compensating for loss.

R
Replacement Cost -- The cost to replace a damaged or destroyed item of property, without deducting depreciation. May be the basis of reimbursement loss to buildings, or by endorsement, to personal property.
Replacement Cost Endorsement -- An endorsement that can be added to an HO-3 form to provide replacement cost coverage on personal property (with limitations).
Reporting Form -- A method of collecting premiums for exposures which are difficult to evaluate "before the fact". Instead of paying a flat premium, the insured pays a deposit, then submits periodic reports to the insurer, showing the status of the factors on which premium is based. From these status reports, premiums are calculated and charged against the deposit.
Representation -- Statements an applicant for insurance believes to be true. Does not carry as much force as warranty.
Residual Market -- An organization created by the Legislature to provide Florida residents with crucial or required coverages generally unavailable in the voluntary market.
Retroactive Date -- A date stated in the Declarations of a CGL Coverage form which is normally the same date as the date of the issuing company's first Claims-Made policy for the insured. No coverage is provided under the Claims-Made form for bodily injury or property damage that occurs prior to the retroactive date.
Robbery -- In Crime insurance, the taking or attempted taking of property by one who has caused or threatened to cause bodily harm or committed and witnessed an obviously unlawful act.
Robbery and Safe Burglary Coverage -- A Commercial Crime Coverage form that covers loss to property other than money or securities from robbery of a custodian, robbery outside the premises, and safe burglary.
Running Down Clause -- An Ocean Marine clause that provides protection should the ship owner be held liable for the negligent operation of the vessel in damaging another ship.

S
Safe Driver Insurance Plan -- An Automobile insurance rating program which applies the lowest rates to operators with the best driving records. Points are assigned for accidents and traffic violations, with higher rates resulting as points increase.
Salvage -- Damaged property that may be retrieved, reconditioned, and sold to reduce an insured loss.
Scheduled Personal Property Endorsement -- An endorsement to the Homeowners policy that schedules specific amounts of coverage for one or more of several categories of personal property on an all-risks basis.
SR-22 Filing -- A form which must be filed by the insurance company stating that auto liability insurance is in effect for a particular individual. Required when insurance is provided to an individual who was in an accident or was convicted of a traffic offense and was unable to show financial responsibility.
Self-Insurance Bond -- A Surety bond that can be provided as evidence of compliance with an insurance requirement.
Settlement -- An adjustment where the disposition of the claim involves the payment of a sum of money to the insured or third-party claimant.
Severability Clause -- A standard Liability insurance clause which means that insurance applies separately to each insured.
Signs Coverage Form -- A Commercial Inland Marine Coverage form that provides all-risk coverage for neon, fluorescent, automatic, or mechanical electrical signs.
Single Limits -- In Auto Liability, policy limits that apply to all bodily injury and property damage arising from a single accident.
Small Business Boiler and Machinery Coverage -- A Boiler and Machinery Coverage form designed specifically for small businesses. Does not require attachment of Objects Definition form, since definitions are built in.
Specific Insurance -- Property specifically listed and covered for a specific amount. Also called Scheduled coverage.
Split Limits -- In Auto Liability insurance, policy limits that apply one limit to each person injured, another for the bodily injury claims of all persons injured in a single accident, and a separate limit for all property damage arising out of a single accident. Split limits are usually written without zeros and separated by slashes, for example, 10 / 20 / 10. Also called dual limits.
Straight Deductible -- A deductible that specifies the deduction of a flat amount from a loss payment, regardless of the size of the loss.
Subrogation -- The transfer to the insurance company of the insured's right to collect for damages.
Subdivision Bond -- A Contract bond that may be required by an authority, guaranteeing that promised streets, walks, sewers, lights, and other required improvements will be installed.
Sue and Labor Clause -- A clause in Ocean Marine policies that requires the insured to take all steps necessary to save and preserve goods from loss or to minimize a loss which has occurred.
Supplementary Payments -- Found in most liability contracts. Supplementary Payments provide "extra" coverage over and above the insured's limit of liability. Included are defense costs, first aid, bond premiums, accrued interest on judgments, etc.
Supply Contract Bond -- A form of Contract bond which guarantees that a supplier will furnish supplies, products, or equipment, sometimes including installation. See Contract bond.
Surety -- The party (often the insurance company) which agrees to be responsible for loss which may result if the principal does not keep his promise.
Surety Bonds -- Bonds which guarantee that someone will perform faithfully whatever he or she agrees to do or that someone will make an agreed upon payment to another party.
Surgical Expense Insurance -- A type of Health insurance that covers fees of physicians for performing surgery, with a maximum amount payable for each procedure.

T
Theatrical Property Coverage Form -- All-risks Commercial Inland Marine Coverage form that covers scenery, costumes, and theatrical property for either a single production or blanket for all productions.
Theft -- In Crime insurance, a broad term encompassing any unlawful taking of property, but usually meant to exclude employer dishonesty and mysterious disappearance.
Theft, Disappearance, and Destruction Coverage Form -- A Commercial Crime Coverage form which covers money and securities for loss by theft, disappearance, or destruction, both inside and outside of the premises.
Third-Party Insurance Coverage -- Those coverages under which the insured obtains protection against a legal obligation to pay damages to others because of injuries to persons or damage to property.
Towing and Labor Endorsement -- An endorsement that can be added to an auto policy to cover towing and the costs of labor performed at the site of the disablement.
Trailer Interchange Insurance -- A legal liability coverage provided under the Truckers Policy. Provides coverage for damage to a specific trailer under the policy of the trucker in whose possession the trailer is at the time of loss, provided the trucker is liable for the damage under a written interchange agreement and the damage is caused by a covered peril.
Truckers Coverage Form -- A form that is part of the Commercial Auto Coverage Part and is designed specifically for the trucking industry. Includes Trailer Interchange insurance.

U
Uncontrolled Lines -- Commercial Inland Marine coverages which are not standardized.
Unfair Insurance Trade Practices Act -- A Florida law describing certain practices that are prohibited, such as misrepresentation, denying claims without reasonable investigation, etc.
Uninsured Motorists Coverage -- Automobile coverage designed to provide protection for the insured should he or she be included in an accident in which the driver at fault has no insurance (or not enough insurance) to cover the loss.
Unscheduled Coverage -- A single coverage amount which applies generally to personal property. Also called blanket insurance.
U.S. Internal Revenue Bond -- A Surety bond required of those who collect and must report taxes for certain controlled commodities, such as liquor or tobacco.
Utmost Good Faith -- A principle of insurance which states that the insurance company must be able to rely on the honesty and cooperation of the insured, and the insured must rely on the company to fulfill its obligations in good faith.

V
Vacancy -- The absence of people and personal property from a building. Property coverage is often restricted when there are long periods of vacancy.
Valuable Papers Insurance -- Inland Marine coverage form which provides all-risk coverage for valuable papers such as manuscripts, blueprints, records, and other printed documents.
Value Reporting Endorsement -- An endorsement that can be added to Commercial Property policies which sets the limit of insurance somewhat higher than expected peak values and then requires the insured to make periodic reports of actual values. These reports are averages and the premium is then adjusted to reflect the average exposure.
Valued Policy Law -- A statute, which states that if there is a total loss by a covered peril to a building, structure, mobile home, or manufactured housing unit, the insurer must pay the amount provided in the policy for which premium has been paid.
Vandalism and Malicious Mischief (VMM) -- Protects property against damage caused by vandals. Many property forms contain Vandalism and Malicious Mischief coverage.
Vicarious Liability -- Negligence which is not directly attributable to the person claimed against, but which is the negligence of another for whom the person claimed against is in some way responsible. See Contingent Liability.

W
Waiting Period -- In Disability or Health insurance, a period of time between issuance and acceptance before sickness benefits begin.
Waiver -- The voluntary or intentional relinquishment of a known right. A waiver may be expressed or implied.
Waiver of Premium -- An optional provision in Health insurance policies that states that if the insured becomes totally disabled, premiums are waived and coverage remains in force.
Warranty -- A specific agreement between the insured and the insurer that certain conditions will be met. This agreement becomes a part of the policy.
Watercraft Endorsement -- An endorsement to the Homeowners contract which provides coverage for watercraft which is excluded under the HO policy itself.
Workers Compensation Insurance -- Insurance which covers an employer's obligations under Workers Compensation laws, which make the employer responsible for stated damages in the event of a work-related injury or illness. Workers Compensation coverage also includes separate coverage for Employers' Liability.

 
     
 


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