Insurance Terms
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INSURANCE TERMS

Act of God. A natural disaster or force of nature, such as an earthquake, hurricane or flood.

Additional Insured. An insured specifically named in the insurance policy.

Adjuster. A claims adjuster evaluates losses that may be covered by an insurance policy to determine how much should be paid by the carrier on particular claims.

  • Company adjusters are employed by insurance carriers and represent their interests.
     
  • Independent adjusters are hired by insurance carriers on an as-needed basis and represent the interests of the carrier.
     
  • Public adjusters are hired by the insured to represent their interests.

All-Risks Coverage. Insurance that covers all losses except for those specifically excluded.

Bare Walls Coverage. A form of property damage insurance that does not cover improvements to the unit such as fixtures, appliances, interior partitions, wall coverings, floor coverings, cabinetry, etc. The insurance is less expensive because it is limited to restoring the bare walls, floors, and ceilings of an individual unit.

Carrier.
Insurance company.

Certificate of Insurance. Written evidence that an insurance policy has been issued, indicating both the amounts and the types of insurance. It is used when general contractors or property owners require subcontractors to provide evidence of insurance.

Claims-Made Policy. A liability policy that provides coverage for an injury or loss if the claim is first reported or filed during the policy period. This is in contrast to the broader occurrence policy forms, which cover injury or loss that occurs during the policy period, regardless of when the claim is first made.

Commercial General Liability (CGL) Insurance. Broad coverage that provides cover for all liability exposures of a business not specifically excluded.

Deductible. The amount which a policyholder agrees to pay toward the total amount of an insured loss.

Directors and Officers (D&O) Liability. Insures directors and officers of companies for negligent acts or omissions, misleading statements which result in lawsuits against the company including allegations of mismanagement.

Employment Practices Liability. Coverage that provides an employer reimbursement for legal expenses to defend suits by employees alleging wrongful discharge, discrimination or sexual harassment.

Fixtures. Items which are permanently attached to floors, ceilings and walls, such as cabinets, plumbing and lighting fixtures.

Gross Negligence. The intentional failure to perform a manifest duty in reckless disregard of the consequences affecting the life or property of another. A reckless action without regard to the life, limb and/or property of another.

Hold Harmless Clause. A clause in a contract by which one party agrees to assume the liabilities of the other party.

Indemnification. The agreement by one party to secure another party against an anticipated loss, or the compensation given to such other party after a loss is sustained.

Insured. A person or organization covered by an insurance policy, including the "named insured" and any other parties for whom protection is provided under the policy.

Joint and Several Liability. A legal obligation under which a party may be liable for the payment of the total judgment and costs, even if that party is only partially responsible for the loss.

Liability Limits. The maximum amount of money a policy will pay in the event of a claim. Depending on the type of policy, defense costs may or may not be included in the limit of liability.

Limits. The maximum amount of coverage that can be paid for a covered loss.

Multi-Peril Policy. A package policy that provides coverage against several different perils.

Occurrence. An accident, sickness or other event that results in an insured loss.

Peril. The type of event that causes damage or injury to occur such as fire, windstorm, hail, etc.

Policy. The physical document that represents the contractual agreement between an insured and an insurer which sets out all the terms, conditions and provisions of the coverage.

Policyholder. The person or persons whose name is stated within the policy document as being the named insured.

Premium. The agreed-upon amount of money paid to the insurance carrier for the policy.

Rider. An attachment or endorsement to an insurance policy that modifies clauses and provisions of the policy. Riders include or exclude coverage.

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