The rating system developed and published annually by A.M. Best Company that indicates the
financial condition of insurance companies.
A transaction in which one party, the "reinsurer," in consideration of a premium paid to
it, agrees to indemnify another party, the "reinsured," for part or all of the liability assumed by the reinsured
under a policy or policies of insurance that it has issued. The reinsured may also be referred to as the
"original" or "primary" insurer, or the "ceding company."
A dollar amount specified in an insurance policy (usually a liability insurance policy)
that must be paid by the insured before the insurance policy will respond to a loss. SIRs typically apply to both
the amount of the loss and related costs, e.g., defense costs, but some apply only to amounts payable in damages,
e.g., settlements, awards, and judgements. An SIR differs from a true deductible in at least two important ways.
Most importantly, a liability policy's limit stacks on top of an SIR while the amount of a liability insurance
deductible, the insurer is not obligated to pay the SIR amount and then seek reimbursment from the insured: the
insured pays the SIR directly to the claimant. While these are the theoretical differences between SIRs and
deductibles, they are not well understood, and the actual policy provisions should be reviewed to ascertain the
actual operation of specific provisions.
A survey of the financial records of a person or organization conducted annually (in most
cases) to determine exposures, limits, premiums, etc.
Insurance covering loss of income suffered by a business as a result of not being able to
use property damaged by a covered cause of loss during the time required to repair or replace it. Both of the
Insurance Services Office's (ISO's) business income coverage forms (CP 00 30, the business income and extra
expense coverage form and CP 00 32, the business income coverage form without extra expense) provide business
interruption coverage, although they use the term "business income" in place of the term "business interruption."
A document providing evidence that certain general types of insurance coverages and limits
have been purchased by the party required to furnish the certificate.
One of several standard terms of sale for exports and imports. CIF indicates that the
seller must obtain transit insurance on the goods, since the price paid by the buyer includes the cost of goods,
insurance while they are in transit, and all freight charges.
Liability under the Employee Retirement Income Security Act of 1974 for the exposure
arising out of the responsibility as an officer or fiduciary of a company for the handling of pension funding and
other employee benefit plans. Should the fiducial responsibility be breached, the individual is personally liable
for the loss. The resulting exposure is usually excluded from the general liability policy, even when employee
benefits liability coverage is purchased. However, coverage may be purchased in the form of a seperate fiduciary
liability policy.
An insurance form that protects the insured against liability for committing an error or
omission in performance of professional duties. Generally, such policies are designed to cover financial losses
rather than liability for bodily injury and property damage.
Coverage for expenses in excess of normal operating expenses that are incurred to continue
operations after a direct damage loss. Extra expense coverage is appropriate for service businesses whose
property is not essentially income-producing (banks, insurance agencies, and doctors' offices), and for
businesses that would find it imperative to continue operation regardless of cost (newspapers, daires). perhaps
by using competitor's facilities.
Coverage for the insured's liability for fire damage to premises rented to the insured.
Included in the 1986 commercial general liability policy, but subject to a separate limit of insurance. This
coverage can also be provided in a property policy.
For classifying commercial vehicles under the business auto policy, five or more
automobiles. Less than five is considered nonfleet. The distinction is made for statistical coding purposes. It
does not have effect on the rating factors.
One of several standard terms used in contracts of sale to indicate responsiblity for
damage to goods during shipment. When goods are shipped FOB, the seller's responsibility ends when a carrier
takes possession of them, or, with respect to ocean shipments, when the merchandise is placed safely aboard the
vessel or when an on-board bill of lading has been issued. The buyer is responsible for insuring the goods from
that point on.
pays for loss of wages and medical expenses (with limitations) due to an injury sustained
in an automobile accident. It also covers funeral expenses in the case of death caused by an auto accident.
which protects you in the event you are determined to be legally responsible for an
accident in which someone is injured or killed.
pays for damage to your own auto that results from colliding with another vehicle or
object, or from a vehicle rollover. Your car is covered no matter who causes the accident less the amount of your
deductible.
pays for damage to your auto caused by something other than a collision. This includes
fire, theft, vandalism and disasters such as, flood, hail, and contact with a bird or other animal.
helps protect you if you cause an injury to others or damage the property of others with
your vehicle, and you are determined to be legally liable. It protects you from lawsuits arising out of the
ownership of a covered automobile or the negligent operation of that auto. Because this coverage protects your
assets, should there be a lawsuit, it's important to have this coverage and keep the amount of coverage (limits)
at a consistently high level. There are two types of liability insurance:
covers the cost of doctors, hospitalization for you and/or your passengers that result from
an accident, regardless of who is at fault. This coverage will also protect you when you drive another person's
car (with permission) or if you or your family members are struck by another vehicle as pedestrians. The
availability of medical payments insurance varies by company (usually in the $5,000 - $10,000 range).
covers the damage your vehicle causes to someone else's property, such as their car,
mailbox or a fence on their land.
will pay for the cost of a rental car while your car is being repaired due to an accident.
This coverage offers a choice of different daily dollar amounts with a maximum aggregate limit ($15- $50 per day
with a $600 maximum benefit).
will pay up to a fixed amount (check your policy declarations page) for towing and labor
charges (such as towing to a garage, changing a flat tire or "jump starting" your motor, but not for parts
needed, such as a new tire) at the place of disablement each time your car breaks down.
will pay for damages that exceed the amount of coverage carried by an underinsured driver.
Provides coverage for bodily injury, and in some states property damage, caused by a
motorist that is not insured. Uninsured motorists coverage allows an insured to collect from his or her own
insurer as if it covered the negligent third party.
Allows coverage for improvements that you make to your condominium such as, wall-to-wall
carpeting, built-in appliances, etc. Also, according to the bylaws of your condominium association you may be
responsible for interior portions of your condo such as walls and doors.
In the event of a major loss that makes your home uninhabitable, and you should have to
move out and live elsewhere while your home is being repaired or rebuilt, the additional costs over and above
your existing living expenses are covered for a set period of time.
Accidents can and do happen. Sometimes they happen to other people while at your home, or
by a member of your household. This coverage helps pay for the expenses associated with an event that caused a
physical injury to others, caused by you, a household member or a pet.
This coverage provides reimbursement for unauthorized use of your credit cards or for
checks that were forged and cashed.
This coverage protects you if you should he held legally responsible for any fire damage to
the building in which you live. This coverage not only protects your home, but also any vacation property that
you may rent.
This coverage provides up to $1,000 (option to increase) of protection if damage to
commonly owned property should exceed the amount of coverage provided in the Condominiums master policy. In the
event that your condo association is forced to assess all owners for an additional loss, loss assessment will
provide you with coverage.
Will pay for medical expenses if someone outside of your family household is injured while
on your property, or is injured by you or a resident household member away from your property (No-Fault/Goodwill
Coverage).
Your physical home with its permanent attachments as well as any attached structures
represents your dwelling. The amount of coverage assigned to your dwelling should reflect the amount that it
would cost to completely repair or rebuild your home from the foundation up if your home should suffer a total
loss.
Structures that exist on your property but are not actually attached to your house, such as
a detached garage, gazebo or storage shed represent "Other Structures".
Personal liability pays, up to your limit of liability, when you or a resident of your
family is found legally responsible for damage to the property of others or injuries to persons who are not
members of your household. If you or a family member is found legally responsible, your personal liability
coverage will provide coverage for those damages.
Personal possessions such as your clothing and furnishings represent personal property.
Certain types of possessions are excluded or have limited coverage available under the basic homeowner's policy.
A property insurance provision that changes the valuation of covered property from actual
cash value to replacement cost value: the cost to replace it today with property of like kind and quality without
deduction for depreciation.
If your personal property includes such valuables as fine art, jewelry or golf equipment,
you may want to consider an optional Scheduled Personal Property endorsement to cover them. This endorsement will
provide you with worldwide, "all-risk" protection against fire, theft, and other perils not specifically
excluded. (This coverage is subject to underwriting approval.)
In the event of a covered loss, if you are forced out of your rented property, you will be
able to collect up to a certain percentage of your contents coverage for necessary additional living expenses
(over and above your normal expenses) while your damaged property is being repaired.
Pays for the cost to repair or replace most personal property without depreciation.
Most renters' policies automatically provide you with up to $1,000 of coverage for losses
you incur resulting from forgery or any alteration related to your credit cards, ATM cards or checks used by you
or your residing family members.
In the event that you are sued as a result of a loss that you are found legally
responsible, a renters policy generally provides a minimum of $100,000 of financial protection for liability
claims and lawsuits arising from accidental bodily injury or property damage to others:
Renters insurance provides protection for your personal possessions at or away from home.
Personal property coverage is also referred to as contents coverage.
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While in your rented property
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Caused by your personal activities
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Caused by your children or pets
Provides higher limits and worldwide protection for special property such as jewelry, furs,
cameras, fine arts, etc.
For valuables such as fine art, jewelry or golf equipment. Provides worldwide "all-risk"
protection against fire, theft and other perils not specifically excluded.
Replacement Cost for Contents of personal property that is damaged or stolen. This
options provides worldwide coverage and is not subject to depreciation.
Broadened Contents Coverage provides "all-risk" protection for your possessions. Which
means that your personal property is covered in most situations, regardless of the cause of loss.
Home computer coverage for your personal computer, software and peripheral devices.
Extended coverage for jewelry, watches and furs that are stolen or damaged.
Home replacement cost coverage to provide up to 100% of your home's replacement cost
value if it is completely destroyed due to a covered peril.
A post-injury program that returns injured employees to some type of work as soon as
medically possible. Even if the injured workers are impaired, temporary or modified duties can be assigned that
take into consideration the impairments. The end result is the reduction of indemnity costs associated with the
claims.
A federal act which requires each group health plan to allow employees and certain
dependents to continue their group coverage for a stated period of time following a qualifying event that causes
the loss of group health coverage. Qualifying events include reduced work hours, death or divorce of a covered
employee, and termination of employment.
The Family and Medical Leave Act of 1993 (FMLA) went into effect on August 5, 1993. The law
requires employers with 50 or more employees to offer eligible employees at least 12 weeks of unpaid leave for
the birth or adoption of a child, to care for a sick family member or for the employee's own illness.
A federal act that protects people who change jobs, are self-employed, or who have
pre-existing medical conditions. The act also contains provisions designed to ensure that prospective or current
enrollees in a group health plan are not discriminated against based on health status.
A term describing an insurance policy that covers claims made (reported or filed) during
the year the policy is in force for any incidents that occur that year or during any previous period during which
the insured was covered under a "claims-made" contract. This form of coverage is in contrast to the occurrence
policy, which covers an incident occuring while the policy is in force regardless of when the claim arising out
of the incident is filed - 1 or more years later.
A provision found in many claims-made policies that eliminate coverage for injuries or
damage that occured prior to a specified date even if the claim is first made during the policy period.
