» Common Terms and Definitions

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131 Terms found - Page: 1 » 2 ... 5

Accident [21]
A sudden and unexpected event, which occurs at a specific time and place. In easy-to-read policies, an accident is also defined as a loss which occurs over a period of time.

Actual Cash Value (ACV) [23]
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-Depreciation).

Additional Living Expense [25]
A property coverage included in Dwelling and Older Homeowner contracts, designed to reimburse the insured for an increase in living expenses necessitated by loss to the dwelling. This indirect loss must be the result of direct loss by a covered peril.

adjusted basis [2631]
The base price of an asset or security that reflects any deductions taken on or improvements to the asset or security, used to compute the gain or loss when sold.

ALAE [2549]
Allocated Loss Adjustment Expenses - expenses assigned to a specific claim such as legal fees

Allocated Loss Adjustment Expenses [2550]
ALAE - expenses that can be assigned to a specific claim, such as legal fees

Apportionment [37]
A method for determining how much will be contributed by each company toward a loss covered under more than one policy. A typical apportionment clause provides that the company will pay no more than the same proportion of the loss that its policy limit bears to the total amount of insurance.

Assumption of Risk [42]
A defense against liability based on the common law principle that a person who has been made aware of dangers beforehand assumes the risk and can not attribute the loss to another.

Average Value Method [3299]
Estimates for loss reserves made on an aggregate basis for a group or category of claims.

Bailee’s Customer Insurance [1638]
Provides coverage for loss of a customer’s goods in the custody of a bailee and applied regardless of fault.

basis [1748]
For income and capital gains tax purposes, the value that is used to determine profit or loss when property is sold. Often the basis is what you paid for the property. For example, if you buy a house for $200,000, your tax basis is $200,000. If you later sell it for $350,000, your taxable profit is $150,000. An original tax basis may be "adjusted," meaning that it is increased or decreased to reflect improvements made or damage incurred while you own the property. If you inherit property, you get a new basis: the market value of the property at the time of death. If you receive property by gift, on the other hand, your basis is the same as the giver's was. See stepped-up basis, carryover basis.

Bench Error [1504]
Describes a products liability loss that occurs during the production process.

blanket insurance [49]
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 an employee. Contrast Name Schedule coverage and Position Schedule coverage.

Brand-name Risk [3352]
The possible real or perceived loss of reputation or the blemishing of a brand name.

Broad Form Nuclear Energy Liability [1505]
Liability Exclusion Endorsement form attached to General Liability policies that excludes coverage for any loss arising from nuclear material from a nuclear facility.

Business Interruption Insurance [2496]
Covers losses incurred as a result of a temporary shutdown of an insured’s operations due to physical damage to its property or others’ property. Provides reimbursement for necessary continuing expenses (such as salaries, rents, etc), plus loss of net profits that would have been earned during the interruption, within the policy limits.

Cargo Liability Insurance [83]
Protects against legal liability for loss or damage to cargo or baggage. May be part of an Ocean Marine or Aviation policy.

carryback [2839]
A technique for receiving a refund of back taxes by applying a deduction or credit from a current year to a prior year. also called tax loss carryback.

carryforward [2840]
A technique for applying a loss or credit from the current year to a future year. also called tax loss carryforward.

Causes Of Loss Form [85]
A form which is a part of the Commercial Property Coverage Part of the Commercial Package policy. It specifies what 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. Causes of Loss forms take the place of "perils insured against" provisions

charge off - write off [2846]
An accounting transaction removing an asset from balance sheet or income statement that results in a full or partial loss of that assets value.

  • for a business the inability to collect owed monies from the debtor would be the cause of a write off

  • In manufacturing, the reduction of an asset's value, bringing the value of that asset carried on the company's books ( financial statements ) at an inflated value, in line with its real value.

  • Claims Paid Basis [3309]
    Estimates amounts paid on losses during the specific accounting period - ignores when the loss occurred.

    Coinsurance Clause [88]
    A clause that requires an insured to pay part of a loss if the coverage provide under the policy limits is less than a specified percentage of the value of the property at the time of loss.

    Collateral Source Rule [89]
    The rule of tort law which provides that the plaintiff's award for damages will not be reduced because the plaintiff received indemnification of loss from other sources. Based on the concept that the wrongdoer should not benefit from payments form such collateral sources.

    Collision [90]
    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.

    Completed operations liability [3173]
    A named insured's (contractor's) liability for claims alleging loss that is caused by faulty work and that occurs after the work has been completed.

    Concurrent Causation [98]
    Occurs when two or more perils cause a loss. When one of these perils was covered by an insurance contract, but the other peril was not, courts generally ruled that the entire loss would be covered, even the part of the loss attributable to the peril not covered. Many insurance policies have been reworded to clarify that only loss attributable to a covered peril will be covered.

    Consequential Loss [100]
    Indirect loss which occur as a "Consequence" of a direct loss. Includes Time Element coverages.

    Constructive Total Loss [102]
    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.

    Corridor Deductible [2472]
    Applies between the primary and excess layers of insurance. The insured retains the amount of each loss that exceeds the limit of the primary coverage before the excess coverage takes effect to cover the remainder of the loss.

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