PROFESSIONAL INSURANCE AGENTS OF NEBRASKA & IOWA

the owner of damaged property may seek to "abandon" his property to the company for the purpose of claiming a total loss. Most property insurance policies contain provisions forbidding abandonment of property to the company altogether or without the company's consent.

responsibility without fault or negligence—e.g., liability arising from use of dangerous equipment or ownership of dangerous animals. (See NEGLIGENCE and STRICT LIABILITY)

an event that takes place without one's foresight or expectations; a sudden and unintended event. In insurance, accidents can sometimes be gradual—e.g., exposure to asbestos or another harmful substance over a period of time can be treated as one OCCURRENCE by a general liability policy.

the report of premium transactions, usually on a monthly basis, either provided by the agency to the company, or by the company to the agency.

the cost to the insurance company of securing business; commissions to agents and brokers and, in some companies, field supervision.

an accident or event that is the result of natural causes, without any human intervention or agency, that could not have been prevented by reasonable foresight or care—e.g., floods, lightning, earthquake, and storms. (See FORCE MAEJURE CLAUSE)

the present-day value of property measured in cash, arrived at by taking REPLACEMENT COST and deducting for DEPRECIATION brought about by physical wear and tear and obsolescence.

a person trained in mathematics whose job is to apply the theory of probability to the business of insurance in order to develop insurance rates, and to advise in situations involving questions of probability. (See LAW OF LARGE NUMBERS)

a person other than the named insured who is protected under an insurance contract.

(See CONTRACT OF ADHESION)

an individual representing the insurance company in discussions leading to agreement about the amount of loss and the company's liability. Adjusters may be salaried employees of adjusting organizations operated by insurance companies, individuals operating independently and engaged by the companies to adjust a particular loss, and special agents or staff adjusters employed by the company. (See Florida Statute 626.015(1))

an insurance company that is licensed to transact insurance business in the state, as opposed to NON-ADMITTED INSURERS. Also known as AUTHORIZED insurers.

the risk that someone who expects to need the insurance is more likely to buy it than others, thus negatively skewing the company's claims experience—e.g., in an open enrollment for group health insurance, all unhealthy people might enroll, while many healthy ones might not.

(See PERSONAL & ADVERTISING INJURY)

a relationship between two parties where one (the AGENT) is empowered to act on behalf of the other (the PRINCIPAL). (See AUTHORITY)

the contract which establishes the legal relationship between the agent and the insurer. (See AGENCY)

a person authorized by another to act on his account and under his control. (See AGENCY and Florida Statute 626.015(3))

a CONTRACT in which unequal values are exchanged, because there is an element of chance involved. An insurance policy is an aleatory contract due to the uncertainty of claims.

an insurer formed under laws of a country other than the U.S. (See F.S. 624.06)

a policy which covers against loss of or damage to property arising from any fortuitous cause not specifically excluded, making the coverage broader than that of a NAMED PERILS form. Also known, more accurately, as an "Open Perils" or in some cases "Special" form.

an insurance service organization that develops policies and rates for the insurance industry. (See INSURANCE SERVICES OFFICE)

a periodic payment to be made from a stated or contingent date and continued for a fixed period or for as long as the annuitant or annuitants live. Using an annuity, a fixed sum of money can be disbursed over a period of time. In a life annuity, for example, mortality statistics enable insurance companies to determine the amount of monthly payments that can be made, based on the amount of money funding the annuity and the age and other personal factors of the annuitant.

the AUTHORITY derived from the perception of third parties (i.e., clients) as to the powers an AGENT would be expected to have based on circumstances. Apparent authority may protect the client by allowing unauthorized acts by the agent to bind the PRINCIPAL (i.e., the insurance company), but the agent will ultimately be held liable to the principal. An agent' s actual authority is equal to his EXPRESS AUTHORITY plus his IMPLIED AUTHORITY.

a document prepared by the agent which serves as a request for coverage for the person seeking insurance. It gives the company information about the proposed subject of insurance and the person to be insured.

AUTHORITY granted by an insurer to a licensed agent to transact insurance or process claims on the insurer's behalf. In Florida individuals can become licensed as insurance agents on their own (i.e., they do not need to be sponsored by an insurance company), but the licensed agent cannot write insurance coverage without an appointment from at least one company. An individual can maintain an insurance license for a maximum of two years without holding any company appointments. (See F.S. 626.015(4), 626.104 and 626.112)

a survey of property made for determining its insurable value or the amount of loss sustained. Insurance policies commonly contain an Appraisal Clause to address disputes between the company and the insured over the value of damaged property. (See VALUATION)

an "alternative dispute resolution" method (i.e., an alternative to a lawsuit) in which a third party attempts to negotiate a fair settlement between two parties involved in a dispute. (See Chapter 44, Florida Statutes)

a provision in some insurance policies specifying the procedure through which the company and the insured will settle coverage disputes. This type of provision is broader in scope than an APPRAISAL clause, which only deals with VALUATION disputes.

the willful and malicious burning of property, sometimes with intent of defrauding insurance companies.

a type of RESIDUAL MARKET in which the state assigns policies to insurance companies based on their share of the private market for the line of insurance that is the subject of the assigned risk plan.

the transfer of the legal right or interest in a policy to another party, generally in connection with the sale of property.

used where one places himself in a situation which he knows may be dangerous to him. It can serve as a liability defense in some cases.

sometimes used in place of "insurance" with the same meaning.

a dangerous place or instrumentality attractive to children (e.g., a swimming pool, idle construction equipment, a discarded refrigerator), the owner of which has the legal duty to exercise a higher than ordinary degree of care to protect them from it, regardless of whether the child may be an INVITEE, a LICENSEE, or a TRESPASSER. (See NEGLIGENCE)

the adjustment of a policy based upon a survey of the insured's books and records in order to determine the proper premium to be charged for the actual operations during the policy period. Audit occurs most often when the premium is subject to payroll, sales, or other fluctuating premium bases.

the power an AGENT has to legally bind his PRINCIPAL, which is seldom absolute. An agent's acting outside the limits of his authority generally does not bind the principal and/or makes the agent liable to the principal. (See AGENCY, APPARENT AUTHORITY, EXPRESS AUTHORITY, and IMPLIED AUTHORITY)

the amount of insurance an underwriter says he will accept on a risk of a given class or on specific property, given for the guidance of agents and in response to requests from producers.

an insurer authorized to transact insurance in the state. Also known as an ADMITTED INSURER. (See F.S. 624.09)

the average rate of remuneration per week, computed as prescribed by the law. Used in WORKERS COMPENSATION as a basis for injured workers' lost wages.

a bond guaranteeing that the PRINCIPAL (the defendant in a criminal trial) will appear in court at the appointed time. (See SURETYSHIP)

one who has temporary possession of property belonging to another. (See BAILMENT)

an INLAND MARINE form that covers damage to a BAILEE's customers' property in the bailee's possession (damage to property of others in the insured' s care, custody and control being excluded in most liability policies).

a delivery of personal property by one party (the BAILOR) to another (the BAILEE), usually for some specific purpose and with the expectation that it will be returned—e.g., an individual leaving his television at a shop to be repaired. There are several different types of bailment, and the bailee' s degree of LIABILITY for the property transferred (i.e., the "duty owed" aspect of NEGLIGENCE) varies with the type of bailment. For example, the bailee owes the BAILOR a higher degree of care in the case of a bailment for hire (e.g., dry cleaning, auto repair) than in that of a gratuitous bailment (e.g., lending tools to a neighbor).

one who delivers personal property to another in trust.

guarantees that a contractor who bids on a project will enter into a contract and provide the required CONTRACT BONDS if awarded the job. (See SURETYSHIP)

a preliminary agreement to provide immediate insurance until a policy can be written, either by an agent or company. It should contain a definite time limit, should be in writing, and clearly designate the company in which the risk is bound, the amount, and the perils insured against, as well as the type of insurance.

an insurance policy which covers several different properties or exposures under one form or coverage limit, instead of under separate policies.

a policy covering all the property of the insured (usually a merchant) against most perils, including transportation. It may also cover property of others held by the insured on consignment, sold but not delivered, for repairs, or otherwise held. It usually covers both on and off the insured's premises. Examples: Jeweler's Block, Camera and Musical Instrument Dealers, Equipment Dealers.

protection against loss arising out of the liability imposed upon the insured by law for damages because of bodily injury, sickness, or disease sustained by any person or persons (other than employees). (See LIABILITY and NEGLIGENCE)

a type of insurance coverage designed to address certain equipment-related PERILS that are excluded in other property insurance policies. The equipment that is the subject of the boiler and machinery policy is covered for ordinary perils (fire, lightening, smoke, vandalism, sinkhole collapse, etc.) in commercial property forms, but the boiler policy addresses MECHANICAL BREAKDOWN, electrical arcing, rupture of steam boilers, and other perils that commercial property policies exclude. The term "boiler and machinery" is gradually being replaced by "mechanical breakdown" or "equipment breakdown," which are more descriptive of the coverage being provided.

(See SURETY BOND)

(See NEGLIGENCE)

sometimes used interchangeably with "agent" in insurance, but an insurance agent is generally considered to primarily represent the insurance company, while a broker represents the applicant/insured. An insurance agent may act as a broker in some cases–most commonly, when he or she is trying to place (or "broker") coverage with a company with whom he is not appointed.

property insurance designed for a building under construction.

an organization that classifies and promulgates rates and in some cases compiles data and measures hazards of individual risks in terms of rates in a given territory. (See INSURANCE SERVICES OFFICE)

ordinarily, at common law, the act of breaking into and entering the dwelling of another by night with intent to commit larceny therein. Today, burglary by daytime is also recognized. Under an insurance policy covering loss from burglary, there must be visible marks made upon the premises at the place of entering. (See THEFT, ROBBERY, and LARCENY)

defined in the ISO Business Income forms as the net earnings (or loss) that would have been earned (or incurred), if the loss had not occurred, plus continuing normal operating expenses, including payroll. The intent of Business Income coverage is to put the insured in the position it would have been in had the business not suffered the interruption. For example, if it would have been netting $100 per month (or losing $100 per month), the policy intends to pay an amount adequate to put the business at that level during the PERIOD OF RESTORATION.

a form of coverage that reimburses the insured for loss of earnings during an interruption of business operations caused by a covered PERIL. It functions the way disability insurance does for an individual and enables a business to pay its ongoing bills while its operations are suspended due to property damage at the described premises. (See BUSINESS INCOME and TIME ELEMENT COVERAGES)

underwriting experience based on earned premiums and booked incurred losses for the same calendar year reporting period, regardless of the dates of the loss events.

the termination of an insurance policy or bond before its expiration by either the insured or the company. The notice necessary before such cancellation becomes effective is almost invariably stated in the contract, and minimum notice requirements in cases of cancellation by the company are often established by statute—e.g. Florida Statutes 627.4133 and 627.728.

a company having, in addition to surplus and reserve funds, a capital fund paid in by stockholders. (See MUTUAL INSURANCE COMPANY)

an agent under exclusive contract to one company. (See DIRECT WRITER)

(See MOTOR TRUCK CARGO POLICY and TRANSIT POLICY)

(1) an insurance company which "carried" the insurance; another term for an insurance company or "insurer"; (2) pertaining to transportation insurance, see COMMON CARRIER and CONTRACT CARRIER.

defined in the Florida WORKERS COMPENSATION law as employments anticipated to be completed in ten working days or less with a total labor cost of less than $500. Employers are not required to provide workers compensation for casual laborers whose work is not in the ordinary course of the trade, business, or profession of the employer. (See F.S. 440.02(5) and 440.02(15)(d)5.)

that type of insurance which is primarily concerned with losses caused by injuries to persons and legal liability imposed upon the insured for such injury or for damage to property of others. It also includes such diverse forms as plate glass; insurance against crime, such as robbery, burglary, and forgery; power plant insurance, and aviation insurance. Many casualty companies also write surety business.

to transfer a risk or a portion thereof from an insurance company to a reinsurer. (See REINSURANCE)

a form issued by the company to the insured or other interested parties attesting to the fact that coverage is in force. Certificates cannot be used to alter coverage and generally contain disclaimers stating that certificate holders are not granted any rights under the policy, and the company has no duty to notify them of cancellation.

Commercial General Liability

the practice of using values in an existing life insurance or annuity contract to purchase additional policies with the same insurer for the purpose of generating additional premiums, fees, or commissions. (See Florida Statute 626.9541(1)(aa))

as used in reference to insurance, a claim may be a demand by an individual or corporation to recover under a policy of insurance for loss which may come within the scope of that policy, or it may be a demand by an individual against an insured for damages covered by a policy held by him. In the latter case (i.e., third-party claims), such claims are referred to the insurance company for handling on behalf of the insured in accordance with the contract terms.

(See ADJUSTER)

a type of liability policy that responds only to claims made during the policy period without regard to when the occurrence leading to the claim took place, subject to certain limitations and extensions. The idea behind claims-made coverage is to avoid the "long-tail" exposure (i.e., the tendency for liability claims to come in beyond the policy period) that is inherent in OCCURRENCE COVERAGE. (See EXTENDED REPORTING PERIOD and RETROACTIVE DATE)

the underwriting or rating group into which a particular risk must be placed. It pertains to type of business, location, and other factors.

a section of a CONTRACT, or of riders attached to it, dealing with a particular subject in the contract, such as the "insuring clause," or the "coinsurance clause."

(a) a provision in property insurance policies requiring insureds to contribute a fair share of the total premiums out of which losses are to be paid by carrying an adequate amount of insurance on their property. Typically, it involves carrying an amount of insurance equal to 80 percent of the value of the building (based on either its ACTUAL CASH VALUE or REPLACEMENT COST, whichever VALUATION method applies to that building). The inclusion of this provision, whether mandatory or optional, usually gives the insured lower rates than would otherwise apply, and electing a higher coinsurance percentage can provide an even lower rate. The coinsurance provision provides for the full payment of losses, up to the amount of the policy, if the insured has insurance at least equal to the required percentage of the value of the property covered. If the amount of insurance falls short of the stated percentage, the loss payment for most partial losses is reduced proportionately (i.e., the amount of insurance purchased, divided by the required amount, times the amount of the loss). (b) In health insurance, it refers to a provision requiring the insured to pay a percentage of each claim, until he reaches a stated out-of-pocket limit.

one who shares the loss sustained under an insurance policy or policies. Usually applies to an owner of property who fails to carry enough insurance to comply with the COINSURANCE provision and who therefore suffers part of the loss himself.

a peril that is treated as an "additional coverage" with its own specific agreement in property insurance policies. By separating collapse from the other covered perils and listing perils that can cause a covered collapse, the insurer avoids paying for a collapse loss caused by a peril that is otherwise excluded, such as earthquake.

a defendant in a civil action may not benefit from the fact that the plaintiff has received money from other sources.

an addendum to an auto rental agreement the renter may purchase that waives the renter's responsibility for physical damage to the vehicle, subject to some limitations and exclusions. This exposure may be covered by the renter's own auto insurance, depending on the terms of the policy, the type of vehicle, purpose of the rental, etc.

insurance agents and brokers are usually compensated by being allowed to retain a certain percentage of the premiums they produce. Such an allowance is known as "commission."

the state official charged with the enforcement of the laws pertaining to insurance in the respective states. Sometimes called the Superintendent or Director.

an individual or corporation that offers its services, for a fee, to the public for carrying persons or property from one place to another. (See CONTRACT CARRIER and MOTOR TRUCK CARGO POLICY)

legal doctrine permitting recovery in a negligence action despite the plaintiff having contributed to their own injury, with both parties able to recover according to their respective degrees of negligence. (See CONTRIBUTORY NEGLIGENCE and Florida Statute 768.81)

type of DAMAGES designed to restore injured parties to the same economic position they enjoyed prior to the loss. Includes both ECONOMIC and NON-ECONOMIC damages, but not PUNITIVE DAMAGES.

a form of liability insurance which covers accidents arising out of operations which have been completed or abandoned, provided the accident occurs away from the premises owned, rented, or controlled by the insured.

any form of insurance which is required by law.

when two or more perils occurring at the same time or in sequence contribute to a loss. Property insurance policies typically contain wording to address the situation in which a covered peril and an excluded peril are both involved in causing a loss.

two or more insurance policies which provide the same coverage for the same property and for the same interests are concurrent. (See NON-CONCURRENCY)

a loss arising indirectly from an insured peril.

something of value given as the inducement to a CONTRACT (or release).

a fellowship, partnership, or union; especially, marital association. Used chiefly in the phrase "loss of consortium" in an action for damages for injury to a spouse. (See PAIN & SUFFERING)

a loss of sufficient amount to make the cost of salvaging or repairing the property equal to or greater than the value of the property when repaired.

(See VICARIOUS LIABILITY)

legal principle which holds that ambiguous language in a CONTRACT is interpreted against the drafter of the contract—therefore, in an insurance policy ambiguous language generally goes against the insurance company. (See CONTRACT OF ADHESION)

a BOND that guarantees the performance of a contract. (See SURETYSHIP)

a transportation company which carries the goods of only certain customers and not the public in general, as in the case of a COMMON CARRIER.

a CONTRACT in which one party has little or no say in the wording of the contract—e.g., in an insurance policy the insured is generally accepting a pre-printed contract without negotiating the terms and conditions. (See CONTRA PROFERENTEM)

an agreement between parties that includes all of the following elements: (1) offer and acceptance, (2) legally competent parties, (3) it serves a legal purpose, and (4) consideration (an exchange of something of value by each party).

liability assumed under any contract or agreement. Contractual liability is generally excluded from or limited in liability policies, but may be insurable for an additional premium.

payment by each of several jointly liable parties of their individual shares in a loss suffered; the amount so paid by one of them.

a legal doctrine/liability defense that bars a person from recovering damages, if they contributed in any way to their own injury. (Also see COMPARATIVE NEGLIGENCE)

the various types of insurance considered to fall within the category of INLAND MARINE are generally divided into two major categories: "controlled lines" and "uncontrolled lines." For controlled lines, there are forms filed by a bureau such as ISO, which leads to more standardization of coverages among different companies; for uncontrolled lines there are no standardized filings, so policy provisions vary more among the insurers writing these types of coverage.

all BONDS required of litigants to enable them to pursue court actions, including DEFENDANTS' BONDS and PLAINTIFFS' BONDS. (See JUDICIAL BONDS and SURETYSHIP)

in insurance practice, the word "coverage" is used synonymously with the word "insurance" or "protection."

refers to the difference between OCCURRENCE and CLAIMS MADE liability coverages. The issue is what "triggers" the coverage under a particular policy—an occurrence having taken place during that policy period or a claim having been made during that policy period.

(See COLLISION DAMAGE WAIVER)

a sum of money awarded to someone to compensate for a loss. (See NEGLIGENCE, ECOMONIC DAMAGES, PAIN & SUFFERING, and PUNITIVE DAMAGES)

anyone who possesses a dangerous instrument (e.g., dynamite) has ABSOLUTE LIABILITY for injury or damage arising out of that instrument, regardless of their degree of care or the lack of NEGLIGENCE on their part.

a statement by the applicant for insurance usually relative to underwriting information.

the section of an insurance policy that lists the name and address of the insured, the property covered, policy limits, premiums, policy period, forms attached, etc.

the amount (usually stated as a dollar amount, but sometimes as a percentage) that the insured must assume on all losses with the insurance company paying the amount of the loss in excess of the deductible. The deductible essentially has the effect of reserving insurance coverage for larger, less frequent losses, thus avoiding "nuisance" claims and keeping premiums down. Associated primarily with property, rather than liability, insurance.

the party against whom relief or recovery is sought in a legal action.

bonds given by defendants in litigation enabling them to retain or regain possession of property, pending the outcome of a suit, or to suspend the execution of a judgment while the defendant appeals it. (See COURT BOND and SURETYSHIP)

decrease in the value of property over a period of time due to wear and tear, and obsolescence.

loss of or injury to property, which is caused proximately by the hazard insured against.

an insurance company which sells its policies through salaried employees or agents who represent it exclusively, rather than through independent local agents or insurance brokers. (See CAPTIVE AGENT)

covers directors and officers of a corporation for liability arising from negligent acts or omissions in the management of the corporation on behalf of the shareholders. The D&O policy normally has two coverages—one for direct coverage of directors and officers and the other for indemnification of the corporation when it has advanced payments on behalf of its directors and officers. (See F.S. 617.0834 and 768.1355)

coverage which generally provides non-occupational weekly benefits payable to employees for accident or sickness not within the scope of Workers Compensation Laws.

under certain bonds and policies, a provision is made to give the insured a period of time after the cancellation of a contract in which to discover whether he has sustained a loss that comes within the terms of the contract, and would have been recoverable had the contract continued in force. This period varies from six months to three years where the company can fix the period of time to be allowed. It may also be governed by statute, and in certain bonds the period is indefinite because of such statutory requirement.

an insurance company formed under the laws of the state in which the insurance is written. (See Florida Statute 624.06)

statutes dealing with the selling and serving of alcoholic beverages and the liability exposures entailed in these activities. (See LIQUOR LIABILITY)

a business auto policy endorsement designed to provide coverage to persons who are furnished with company cars but have no personal auto policy (i.e., they don' t own a car).

the provision found in umbrella liability policies whereby the umbrella policy will provide primary coverage, subject to the insured's SELF-INSURED RETENTION. This feature comes into play when the umbrella policy's scope of coverage encompasses a loss not covered by any of the underlying liability policies. (See UMBRELLA COVERAGE)

a type of claim that arises when an employer is sued by an employee in some capacity other than as an employer for an employment-related injury—e.g., the employer' s product injures the employee while he is on the job, and the employee files a product liability claim. EMPLOYERS LIABILITY coverage will address this type of claim (which exclusion "e" of the CGL excludes). If an employee were injured by his employer' s product while not on the job, it would be an ordinary products liability claim covered by the CGL with no WORKERS COMPENSATION or Employers Liability implications.

(See NEGLIGENCE)

short for "errors and omissions." (See PROFESSIONAL LIABILITY)

that portion of the advance premium and audits which the company is entitled to at any period before the date the policy expires or is cancelled.

measurable dollar amounts or out-of-pocket costs in a LIABILITY claim, including such expenses as medical costs; lost wages; and repair, replacement, or loss of use of damaged property. Also known as "special" damages. (See DAMAGES, PAIN & SUFFERING, and PUNITIVE DAMAGES)

the date on which an insurance policy or bond goes into effect and from which protection is furnished.

a type of INLAND MARINE insurance coverage designed to address exposures associated with computers, including both hardware and software.

the risk to an employer of theft by an employee, which can be insured by a Fidelity Bond or Employee Dishonesty Coverage Form and is excluded in property insurance forms and all other crime coverage forms.

coverage against common law liability of an employer for injuries to employees (as opposed to statutory WORKERS COMPENSATION coverage). It is included in the Workers Comp policy as Part Two and complements the statutory WC coverage. How much this part of the WC policy comes into play can vary state-to-state, depending on how the state's workers comp law is written—specifically, how effective the EXCLUSIVE REMEDY aspect of the law is. A very effective WC law should minimize the number of Employers' Liability claims.

liability of an employer for nonphysical injuries to employees or potential employees, such as unfair discrimination, defamation, retaliation, wrongful termination, invasion of privacy, or sexual harassment.

special circumstances frequently require that a policy be altered. Such alterations are effective by attaching to the policy a form bearing the language necessary to record the change.

(See PROFESSIONAL LIABILITY)

(a) coverage that applies on top of underlying insurance. Excess insurance does not pay until the PRIMARY insurance exhausts its limit. (b) That portion of a LINE that exceeds the company's NET LINE or RETENTION.

a liability coverage form that provides additional insurance above underlying policy limits, but does not necessarily provide broader coverage (compare to UMBRELLA coverage). The excess policy's provisions may match the underlying policies' (often called a "following form"), or it may be narrower, or it may be broader in some ways and narrower in others.

a provision in an insurance policy or bond referring to PERILS or property for which no insurance is afforded. The most common reasons for exclusions are exposures not common to most insureds (which can often be added by endorsement); uninsurable exposures (e.g., WEAR & TEAR or illegal activities), catastrophic exposures (e.g., war or nuclear), and exposures that are typically covered by other policies (e.g., homeowners policies exclude liability arising from use of an auto, which is covered by an auto policy).

in WORKERS COMPENSATION it is intended that the statutory workers comp benefits will be the sole source of recovery for injured workers in keeping with the intent of workers comp laws to substitute statutory benefits for lawsuits by injured workers against their employers; therefore, the statutes provide employers with immunity as long as the employer complies with workers comp requirements. (See F.S. 440.10 and EMPLOYERS LIABILITY INSURANCE)

a contract clause that releases one of the parties from liability for his or her actions. (See HOLD HARMLESS)

(See PUNITIVE DAMAGES)

the loss record of an insured or of a class of insureds. (See POLICY YEAR EXPERIENCE and CALENDAR YEAR EXPERIENCE)

a plan, available in certain lines of casualty insurance, which is applicable to risks that meet qualifying tests. This plan provides that manual rates (average rates that reflect the experience of large groups of similar risks) shall be increased or decreased in accordance with the actual past experience of such risks.

the date upon which a policy will cease to cover, unless previously cancelled.

a circumstance or factor leading to the possibility of a loss—e.g., being close to another building from which fire can spread to the insured' s building. (See HAZARD and PERIL)

the AUTHORITY expressly given to the AGENT by the PRINCIPAL through oral or written directions. (See AGENCY)

a common extension of property insurance beyond coverage for fire and lightning, such as windstorm, hail, explosion (except for steam boilers), riot, civil commotion, aircraft damage, vehicle damage, smoke, and volcanic eruption. It was an endorsement to the Standard Fire Policy, but is included in current ISO homeowners and commercial property policies.

in claims-made liability coverage, the ERP provides a limited time after the policy period during which claims can be made and covered by that policy for occurrences that took place prior to the end of the policy period. Some policies contain a limited ERP and offer the option of purchasing a longer ERP. (See CLAIMS-MADE COVERAGE)

extra funds needed to continue a business uninterrupted after a loss. Applied to dwellings, it is called "additional living expense." Coverage is available through Extra Expense insurance and Additional Living Expense coverage in homeowners policies. (See TIME ELEMENT COVERAGES)

commonly used to mean the amount of insurance provided.

the placement of REINSURANCE on a risk-by-risk basis.

common law doctrine that in an action brought against an employer by an injured employee, the employer may allege that the negligence of a fellow employee was wholly or partly responsible for the injury, thus reducing the employer' s LIABILITY. This is one of the common law defenses given up by employers under WORKERS COMPENSATION insurance.

a bond which reimburses an employer for loss due to theft by an employee. This type of exposure is now commonly addressed by the Employee Dishonesty Coverage Form under the Commercial Crime Coverage part of a commercial package policy. (See EMPLOYEE DISHONESTY and SURETYSHIP)

a person who occupies a position of special trust and confidence (for example, in handling or supervising the affairs or funds of another). There are many types of fiduciaries, including an executor of an estate or a court-appointed guardian of a minor.

a type of JUDICIAL BOND that guarantees the performance of a FIDUCIARY.

statutes requiring motorists to furnish evidence of ability to pay damages, either before or after an accident. (See Florida Statutes, Chapter 324.)

the courts have held that fire must be combustion sufficient to produce a spark, flame, or glow, but not an explosion, and must be hostile, as opposed to friendly—i.e., not in the place where it is intended to be, as in a furnace, stove or fireplace, but must be accidental and must be the proximate cause of the damage.

because they often cover multiple insureds (e.g., a partnership), many commercial insurance policies reserve certain rights for the First Named Insured, making it relevant how insureds are listed in the declarations. This practice simplifies the process of making changes to the policy or providing the insured with notice of additional premium, cancellation, etc. for the insurance company.

cancellation of a policy as of the policy effective date, so that there is no earned premium, the effect being as though the policy was never written.

this term is used in several ways: (1) the rate used when no coinsurance clause is attached to the policy, or the rate from which the credits for coinsurance are deducted. In some states this is called the gross rate. (2) Sometimes used for judgment rates.

an insurance contract covering a number of automobiles. The automobiles may be specifically designated or provision may be made for automatic coverage of all automobiles owned by the insured, on a reporting basis. To be eligible for such coverage, all automobiles must be owned by a single insured.

a policy designed to insure moveable property wherever it may be. (See INLAND MARINE)

covers merchandise held for sale that has been financed (e.g., large appliances); can be written on the interest of the lender, the dealer, or both.

a clause found in many contracts that addresses the effect of ACTS OF GOD on either party's obligations under the contract. (See CONTRACT)

an insurance company is so designated with respect to any state or country other than the one in which it is chartered. (See Florida Statute 624.06)

in general, any false writing with intent to defraud. Defined by statute in the various states.

any form of insurance which provides for payment without deduction of all losses occasioned by hazards covered.

the cost to replace property with a less costly alternative that is functionally equivalent. Most commonly used where a unique building has been converted for some commercial use and, if it were destroyed, could be rebuilt more cheaply by using a more conventional (i.e., less ornate, less heavily constructed, etc.) building design. The insured saves money by choosing in advance not to replace the building exactly as it is, thus being able to carry less insurance. ISO has Functional Building Valuation and Functional Personal Property Valuation endorsements among their commercial property forms for this purpose, one of the key provisions of these forms being waiver of the COINSURANCE requirement. (See ACTUAL CASH VALUE, REPLACEMENT COST, and VALUATION)

in maritime law and OCEAN MARINE insurance, "a sacrifice to avert a common peril." It means losses suffered through expenses voluntarily incurred and sacrifices intentionally made by a master of a ship of a part of the ship' s cargo to preserve the rest from destruction. Since they were for the benefit of all, these losses and expenses must be shared proportionately by each of the interests involved.

(See PAIN & SUFFERING)

a right peculiar to governmental bodies exempting them from responding in damages for alleged tortuous acts.