Roberts Insurance Group, LLC
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Insurance Glossary
Conditions: Terms agreed to in an insurance policy that state the rights and requirements of the insured and the insurer.
Contract: An agreement between two or more competent parties with characteristics of mutual assent, valid consideration and legal subject.
Coverage: Coverage is simply another term for insurance. It may mean the dollar amount of insurance purchased or the type of loss covered.
Countersignature: The signature of a licensed agent or representative on a policy that is required to validate the policy.
Debris Removal: The cost to remove debris resulting from covered property damaged by an insured peril.
Deductible: The amount of loss absorbed by the insured prior to determing the carrier's liability.
Depreciation: The reduction in value of property over a period of time. Generally the result of age, normal wear and tear, or economic obsolescence.
Drive Other Car Endorsement: An endorsement added to a business auto policy that provides protection while the designated insured is driving a car other than one named in the policy.
Earth Movement or Earthquake Exclusion: An exclusion found in most property insurance policies eliminating coverage for earth movement or earthquake, with exception of ensuing fire loss.
Effective Date: The date on which an insurance binder or policy becomes active.
Electrical Damage Exclusion: An exclusion found in most property insurance policies eliminating coverage for damge to electrical appliances caused by artificially generated curents (power surge from off premise).
Employee Dishonesty Coverage: Coverage for theft of money, securites or property by an insured employee.
Employmnet Practices Liability Insurance (EPLI):
A form of liability insurance covering wrongful acts arising from employment practices such as wrongful termination, discrimination or sexual harassment.
Endorsement: A document attached to an insurance policy that changes the original policy provisions.
Equipment Floater: A property insurance coverage for equipment that is often away from the insured premise often moved from place to place.
Exclusions: Specified hazards listed in a policy for which benefits will not be paid.
Expiration: The termination date of an insurance policy.
Exposure Base: The basis of rates that are applied to determine commerical premiums. Some exposures may be measured by payroll, gross receipts, sales, square footage, man hours, or per unit.
Extra Expense Coverage: Coverage for reim-bursement of expenses incurred in excess of normal operating expenses to maintain operations following a direct damage loss.
Fine Arts Coverage: Property insurance coverage for works of art.
Fire Department Service Charge Coverage: Many property insurance policies provide coverage for charges incurred by the insured from a fire department for their services in responding to an emergency.
Fire Wall: A wall designed to prevent the spread of fire from one part of a building to another.
Flat Cancellation: The full cancellation of a policy requiring the return of the full premium paid.
Flood Coverage: Coverage for damage to property caused by rising water or a flood as defined by the National Flood Insurance Program.
Flood Exclusion: A provision in most property insurance policies eliminating coverage for damage by rising water or flood as defined by the NFIP.
General Aggregate: The maximum amount of insur-ance payable during the policy period for losses.
Grace Period: The period of time after the due date of a premium during which the policy remiain in force without penalty. (note: most property & casualty policies do not have a grace period)
Gross Negligence: Willful and wanton misconduct.
Host Liquor Liability: Liability coverage for hosts of business or social functions arising out of the serving of alcoholic beverages by a party not engaged in this activity as a business enterprise.
Insurance Policy: The printed form which serves as the contract between an insuer and the insured.
Insured: The party being insured.
Insurer: The insurance company providing coverage typically through a contract of insurance.
Liability: The legal obligation to pay a monetary award for injury or damage caused by one's negligent or statutorily prohibited action.
Liberalization Clause: A provision within an insurance policy that broadens the coverage if the insurance company offers a broader coverage form within the first 45 days of coverage.
Limit of Liability: The maximum an insurance company agrees to pay in the event of a covered loss.
Loss Payable Clause: An insurance clause that authorizes loss payment to a person or entity having an insurable interest in the covered property. (example a mortgage holder)
Lost Policy Release: A signed statement by the named insured when the insured wishes to cancel a policy, but has lost or mislaid the policy, which releases the company from all liability for losses.
Misrepresentation; The act of knowingly present-ing false information.
Abandonment: with reference to property insurance, prohibits the insured from abandoining damaged property to the insurance company for repair or disposal.
Accounts Receivable Coverage: Covers loss of sums owed to the insured by it's customers that are uncollectible due to damage by an insured peril to accounts receivable records.
Actual Cash Value (ACV): Cost to repair or replace damaged property with materials of like kind and quality, less depreciation.
Additional Insured: A person or organization for whom insured status is arranged by endorsement.
Advertising Injury: General liability coverage that insures against libel, slander, invasion of privacy, copyright infringement and misappropriation of advertising in connection with the insured's adverising of it's goods and services.
Agent: An authorized representative of an insurance company or companies.
Aggregate: The maximum amount an insurance company will pay during the policy period.
All Risk Coverage: Property insurance covering losses arising from all causes of loss except those that are specifically excluded from the policy.
A.M. Best Rating: An established rating system by A.M. Best Company evaluating the financial condition of insurance companies.
Application: A specifed form with the information needed for an insurance company to underwrite and rate a specific policy.
Audit: A verification of the financial records, usually payroll or receipts, of an organization to determine level of exposure and premiums.
Bailee Coverage: Coverage on property left in the care, custody, and control of the insured for storage, repair or servicing.
Basic Cause of Loss Form: Property coverage for named perils: Fire, Lightening, Explosion, Smoke, Wiondstorm, Hail, Riot, Civil Commotion, Aircraft, Vehicles, Vandalism, Sprinkler Leakage, Sinkhole Collapse and Volcanic Action.
Binder: A temporary insurance policy that expires at the end of a specific time period or when a permanent policy is issued. A binder is provided to an applicant for insurance during the time it takes to underwrite and issue the policy.
Boiler & Machinery Insurance: Coverage for loss caused by mechanical or electrical equipment breakdown, including damage to the equipment.
Bond: A written agreement in which one party, the surety, guarantees the performance or honesty of a second party, the principal (obligor), to the third party (obligee) to whom the performance or debt is owed.
Broad Causes of Loss form: Property coverage for the named perils: Fire, Lightening, Explosion, Smoke, Windstorm, Hail, Riot, Civil commotion, Aircraft, Vehicles, Vandalism, Sprinkler Leakage, Sinkhole collapse, Volcanic Action, Breakage of Building glass, Falling Objects, Weight of Snow, Ice or Sleet, Water Damage (in the form of leakage from appliances) and Collapse from Specified Causes.
Building Ordinance or Law Coverage: Covers against loss caused by enforement of ordinances or laws regulating construction and repair of damaged buildings (building codes)
Named Perils Coverage: A property insurance term referring to the exact causes of loss listed as being covered.
National Flood Insurance Program (NFIP): A federally funded program established to make flood insurance available to participating communities.
Nonadmitted Carrier: An insurance com-pany that is not licensed to do buiness in a specific state, but may place business through an excess and surplus lines broker that is licensed in that state.
Peril: A specific cause of loss such as fire, windstorm, collision, etc.
Personal Injury: A General Liability coverage for insurable offenses causing harm, other than bodily injury, such as false arrest, imprison-ment, malicious prosecution, wrongful eviction, libel, slander, and invasion of privacy.
Personal Injury Protection (PIP): An auto insurance coverage mandated by law in some states (including Florida) that requires insurers to provide or offer to provide first-party benefits for medical expenses, loss of income, and similiar expenses without regard to fault. (In Florida it is the first $10,000 of exposure)
Personal Property: Tangible property, not classified as real property, such as an insured's household contents.
Policy: The printed documents given an insured, outlining the terms and conditions of the insurance coverage.
Policy Period: The term or duration of a policy including the effective and expiration dates.
Premises: The insured location where coverage applies.
Premium: The agreed upon dollar amount to keep an insurance policy in force.
Primary Policy: The insurance policy that pays first for a covered loss when covered by more then one policy.
Pro rata Cancellation: The cancellation of an insurnace policy with the return premium being proportional to the unexpired remaining term of the policy.
Provisions: Details of an insurance policy which explains the benefits, conditions and other features of the insurance contract.
Reinstatement: Placing a lapsed policy back in force by providing satisfactory evidence of insurability and payment of any premium required.
Representation: Statements made by an applicant for insurance on their application, presented as being true to the best of their knowledge and belief, without being warranted as exact in every detail.
Umbrella Liability Policy: A policy intended to provide an additional amount of liability protection when required underlying policy limits have been exhausted.
Uninsured/Underinsured Motorist Cover-age: Provides coverage for bodily injury losses incurred by an insured when injured by a motorist without or with insufficient insurance limits.
Underlying Coverage: The primary insur-ance coverage in place on the same risk that will respond to a loss before the excess policy is called upon to pay any portion of the claim.
Underwriter: The company or carrier receiving premiums and accepting responsi-bility for fulfilling the policy contract. Also a company employee who evaluates and determines if the company should assume a particular risk, or the agent who sells the policy.
Uninsurable Risk: A person or property who is not acceptable for insurance due to excessive risk according to stated eligibility criteria of the company.
Unearned Premium: That portion of a policy premium that represent the remaining unused or unexpired policy term.
Vacancy Provision: A property insurance provision found in commercial property policies that restrict coverge in connection with buildings that have been vacant for a specified number of days, typically sixty.
Valuable Papers and Records Coverage: A commercial policy coverage that pays the cost to reconstruct damaged or destroyed valuable papers and records which typically includes printed documents except money or securities.
Waiver of Subrogation: The transfer of rights of recovery or the relinquishment by an insurer of the right to collect from another party for damages paid on behalf of the insured.
Workers Compensation: Protection which provides benefits to employees for injury or contracted disease arising out of and in the course of employment. Most states have laws which require such protection for workers and prescribes the length and amount of such benefits.
Business Income / Interruption coverage: Covers loss of income by a business when operations are interrupted due to property loss from a covered peril.
Business Owners Policy (BOP): a package policy that combines property and liability coverages for special types of small businesses.
Cancellation: The temination of an insurance policy usually prior to the expiration.
Carrier: The insurance company providing coverage.
Casualty Insurance: Insurance that covers losses caused by injuries to persons and the legal liability imposed on the insured for injury or for damage to property of others.
Catastrophe: A severe loss causing significant financial loss.
Causes of Loss Forms: The commercial properrty forms that define the covered causes of loss for which coverage is provided. Commonly there are three Cause of Loss Forms: Basic, Broad and Special Form.
Certificate of Insurance: A document providing evidence an insurance policy has been issued.
Claim: A request by a policyholder or a claimant for payment under an insurance policy.
Claimant: The person submitting a claim.
Claims Reserve: An amount of money set aside to meet a reported claim that has not yet been paid.
Class: A grouping of businesses who have common or similar exposures for rating purposes.
Classification: Establishing business categories for rating purposes.
Coininsurance Provision: An insurance provision for property coverages in which the policyholder must carry an amount of insurance that is at least equal to a set perrcentage of the value of the property to qualify for full payment of a loss.
Commercial General Liability (CGL): A coverage which protects a business against liability claims for bodily injury and property damage. These claims may be the result of events occuring at your place of businesss, the pro9ducts or services you provide, or communications or advertisements broadcast.
Completed Operations: A general liability coverage for the work performed by the insured that has been completed away from the business premise.
Concealment: Failure to disclose pertinent facts which may void an insurance policy.
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