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Camera Floater
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An inland marine form designed to insure cameras and their equipment.
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Cancel
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To terminate a contract. Usually applied to the termination of a policy before its natural expiration, but may be used to describe the ending of any contract during its natural life, such as an agent's contract.
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Cancelable Policy
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This type of insurance policy may be canceled by the insured or the insurer at any time, as long as the other party is notified according to the terms and conditions set forth in the policy, and the appropriate time is allowed during the notification process.
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Cancellation Notice
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The notice issued by one party of the policy to the other, informing of the intent and request to cancel. The policy provisions must be followed during the notification process with respect to how the notice must be given (normally in writing), the number of days that must be allowed, and how the notice must be delivered (registered mail, delivery, etc.)
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Captive Insurance Company
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A company which is wholly owned by another organization (generally non-insurance), the main purpose of which is to insure the risks of the parent organization. A pure captive is owned by a single parent, while an association captive is owned by a group of companies usually in the same line of business.
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Care, Custody and Control
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Most liability policies have provisions that exclude coverage for physical damage or loss to property while it is in the care, custody or control of the insured. Two methods are available to buy-back some or all of the care, custody, and control coverage: either endorsements to the liability policy, such as the broad form property damage endorsement or its company-specific equivalent which will provide limited coverage, or the purchase of inland marine coverages such as bailees forms.
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Cargo
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Goods being transported by rail, plane, truck, ship, or other conveyance, excluding the equipment needed to operate the conveyor.
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Carrier
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1) The insurance company which provides the protection for a particular risk.
2) A transporter of goods, a form of bailee for which insurance is provided. A common carrier is one which is available to the public for the transport of any goods. A private carrier transports only the goods of its owner.
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Carriers Legal Liability
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An insurance policy designed to provide coverage for the bailee exposure of cargo carriers that would result from damage to property of others that has been entrusted to the carrier for transport.
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Cash Surrender Value
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In a life insurance policy, if the insured wishes to surrender the policy in order to collect the cash value of the policy, the cash surrender value is the amount the insured is entitled to, as stated in the policy, based upon time in the policy,limits and payments. The amount of cash the insured will receive may be reduced by a surrender fee, any outstanding loans, and applicable interest.
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Cash Value
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The amount that a life insurance policy will pay the insured if the Policy is terminated or canceled prior to maturity. The cash value is the amount the insured is entitled to, as stated in the policy, based upon time in the policy, limits and payments. The amount of cash the insured will receive may be reduced by a surrender fee, any outstanding loans, and applicable interest.
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Casualty Insurance
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Insurance concerned with legal liability for personal injuries or damage to property of others, including many other types of insurance, such as workers compensation, plate glass, burglary, boiler and machinery, aviation, etc. "Casualty" is generally accepted to cover all classes outside the definition of "property insurance,"
so that a property and casualty company would tend to handle all forms of insurance other than life.
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Cause of Loss
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Previously called "peril," this is the actual type of event that causes the loss. Examples are: theft, collision, earthquake, flood, fire, or mischief.
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Certificate of Insurance
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A short-form documentation of an insurance policy.
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CGL - Commercial General Liability Policy
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The commercial general liability policy provides comprehensive general liability coverage for commercial risks covering all liability exposures for all locations and causes of loss except those specifically excluded or limited either within the coverage form or by endorsement. Protection may be provided on either an occurrence type of policy or on a claims-made-basis.
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Charters Liability Insurance
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Liability coverage for parties or individuals who lease a vessel from another party.
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Chop Shop
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Slang term for illegitimate enterprises which offer parts from dismantled stolen vehicles for sale.
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Civil Authority Clause
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A provision in a policy requiring the payment of the loss suffered by the policyholder if the insured property is
destroyed by the city, or other civil authority, in an effort to prevent the spread of fire.
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Civil Commotion
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A disturbance among, or a popular uprising of a large number of people.
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Civil Commotion Exclusion
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A property policy exclusion that specifies that there is no coverage for property damage suffered as a result of any type civil commotion or riot.
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Claim
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An amount requested of an insurer, by a policyholder or a claimant, for an insured loss.
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Claimant
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One who presents a claim, or one who has suffered a collectible loss.
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Claims Reserve
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An estimate of the amount an insurance company expects to pay for reported and estimated claims. This may include amounts for loss adjustment expenses. In an insurance company's financial statement, it includes losses incurred but not reported, losses due but not yet paid, and amount not yet due.
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Claims-Made
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A liability insurance method covering losses from claims asserted against the insured during the policy period, regardless of whether the liability-imposing causes occurred during or prior to the policy period. (However, may underwriters may not cover liability-imposing causes occurring prior to the policy period.) The coverage trigger is based on the retroactive date stated in the Declarations.
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Claims-Made Trigger
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In order to trigger coverage in a claims-made liability policy, a claim must be made against the insured during the policy period and the injury or damage alleged in the claim must not have occurred prior to the retroactive date specified in the policy Declarations.
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Class Rate
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Rates developed for a line of property/casualty business based on the concept of what is average for that particular class. For example; the class rate for fire on a frame grocery store would be based on the average statistics for all frame grocery stores and would be applied to all frame grocery stores unless otherwise specifically rated. Rates are then deviated for other factors such as the public protection class and, when applicable, individual risk characteristics.
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Classification
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The systematic arranging of properties, persons or business operations into groups or categories according to certain criteria. The purposes of such classification in insurance are to create bases for establishing statistical experience and determining rates, and to avoid unfair discrimination. The essential concept of establishing classifications is that each risk should bear its fair share of the overall cost of expenses and loses in relation to its own relevant expenses and hazards. It is unfair discrimination to charge different rates for similar risks,and it is equally wrong to treat in the same manner risks which have differenct costs and expenses.
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Clause
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Language in a policy which describes, limits or modifies coverage granted.
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Clean-Up Costs
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Costs that a party incurs to clean pollutants from the ground, water or air after the occurrence of a pollution incident. These costs are usually mandated or assessed in response to a confirmed incident by the Environmental Protection Agency (EPA).
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Co-Payment
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A flat, pre-set fee paid by an insured for office visits, drugs, and other medical services as member of an HMO or preferred provider service. These co-payments are normally a small fraction of the overall cost and act much like a service charge or handling fee.
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Coastal Waters
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For the insurance of yachts and outboard motor boats, the waters of bays and inlets, as well as of the sea along the coast. Also referred to as contiguous waters.
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Coinsurance
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The provisions in insurance coverages in which the insured and the insurer agree to share in the covered losses in the proportion specified in policy terms and conditions.
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Coinsurance Clause
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1) In property insurance, a clause requiring the insured to maintain insurance at least equal to stipulated percentage of value in order to collect partial losses in full. If the insurance is less than the minimum required, that portion of the loss will be paid which the amount of insurance carried bears to the amount which should have been carried.
Symbolically:
Insurance Carried x Loss = Payment
Insurance Required (subject to
policy Limit)
2) In major medical insurance, the clause which specifies the percentage of a loss which the company will pay and the percentage which the insured will bear (e.g., 80-20, 75-25).
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Collision Damage Waiver
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When renting an automobile or other vehicle from a rental agency, the rental agreement between renter and rental agency may contain an option allowing the renter to pay an additional fee in exchange for the agreement by the rental agency to waive their rights to collect any collsion losses to the vehicle from tne renter.
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Combined Ratio
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The addition of the ratio of losses incurred to earned premiums, and the ratio fo underwriting expenses to written premiums.
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Commercial Multiple Peril
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A general term, sometimes shortened to commercial multi-peril, relating to that class of package policies which provides coverage for more than one peril or cause of loss in one contract. Not the same as a commercial package policy, which contains more than one line of business.
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Common Area
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Most often used in reference to the property and liability coverages for apartments, condominiums, townhouses, cooperatives, and other related risks. Common areas are those areas not specifically owned by a tenant or individual property owner, but are owned either by the landlord or all the occupant-owners, or are under the control of the landlord or association. Common areas are open to all. The most common examples are hallways, parking areas, and recreational facilities.
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Commutation Clause
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A clause in a reinsurance agreement which provides for discharge of all obligations (past, present and future) between the parties for reinsurance losses incurred. This clause is usually optional but may be mandatory.
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Comparative Negligence
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A more modern system of allocating damages between two or more persons than the method of contributory negligence, which remains effective in many states (under which one cannot collect damages for bodily injury or property damage caused by another party's negiglence if one were oneself in any way negligent). Under comparative negligence, the damaes collectible in relation to another person are diminished in proportion to one's degree of negligence. In most instances, damages cannot be collected at all if the claimant's negligence was greater than that of the other party. Currently, in a few instances, the courts have awarded both parties damages as a percent of the total damages, depending on respective degrees of fault.
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Compensation Insurance
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Protection which provides various benefits to employees for any injury or contracted disease arising out of and in the course of employment. All states have laws which require such protection for workers and prescribe the length and amount of such benefits that are provided. Originally, workers ceded their rights to sue in exchange for workers compensation benefits, but in recent years lawsuits have successfully eroded this concept.
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Compensatory Damages
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Not to be confused with punitive damages, which are additional damages requested by an injured party to punish the party responsible for the loss, compensatory damages are normally monetary damages alleged by the claimant to compensate for actual injuries or expenses sustained. These may include all types of medical expenses, as well as other expenses such as lost wages, legal fees, pain and suffering, mental anguish, loss of consortium, etc.
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Comprehensive Personal Liability
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A form of liability insurance which reimburses the policyholder, if liable to pay money for damage or injury caused to others. This form does not include automobile liability but does include almost every activity of the policy holder except such as may arise from the operations of a business, hence "personal" liability. The coverage is a part of either homeowners or tenants policies and is almost obsolete as a separate policy.
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Compulsory Insurance
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Coverage required by certain states of certain people in certain circumstances, e.g., workers compensation and automobile liability.
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Concealment
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In insurance, failure to disclose a material fact which may void an insurance policy.
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Condominium
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A form of real estate ownership becoming increasingly popular. It is the individual ownership of a single unit in a multiple-unit building or group of buildings, together with a percentage interest in that part of the total property owned jointly by all unit owners. In an apartment building, each apartment would be a unit and the stairways, pathways and parking areas would be in common ownership. Condominium property requires special insurance treatment.
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Consequential Loss
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A reduction in value of property (not physically damaged) caused by damage to other property. Examples are food spoilage from a change in temperature due to the damage of a refrigerator by fire, while the food itself is not damaged by the fire, or the reduction in the value of suit jackets whose trousers have been damaged.
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Constructive Total Loss
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Damage to property which is so great that the cost of recovering and repairing the property would exceed the insured value.
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Contingency Cover
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A reinsurance agreement applying to casualty insurance. This is an excess of loss agreement where the underlying amount to be retained by the ceding insurer is at an amount which is highter than the limit on any one reinsured policy. This agreement provides payment of loss in unusual circumstances when two or more casualty policies experience the same occurrence of loss and the total amount of the payment of losses for the multiple policies exceeds the clash cover retention amount. This is sometimes known as clash cover.
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Contingent Beneficiary
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The party designated to receive the benefits or proceeds of a life insurance policy or retirement plan should the primary beneficiary die.
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Contingent Business Income
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The insurance against loss due to interruption of business by fire or other insured cause of loss occurring at the premises of another on whom the continuation of the business is dependent, such as the premises of a supplier or a large customer.
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Services