Insurance Terms Glossary

Below is a collection of terms and definitions that deal with Commercial Insurance. Please use this as a reference guide for learning more about a specific area of coverage or learning the different terminology within it. The guide is in alphabetical order by insurance type. Just click on the heading to view the terms within that section. If you'd like more explanation about any of the terms below, just contact a Brown & Brown Empire State Producer today!

Aviation: Owned - Liability provides protection for loss incurred through legal liability for bodily injury and damage to property of others caused by accidents arising out of ownership, maintenance, or use of an aircraft.  Hull coverage (physical damage) provides for loss or damage to owned aircraft.

Aviation: Non-Owned - Liability provides protection for loss incurred through legal liability for bodily injury and damage to property of others caused by accidents arising out of use of a non-owned aircraft.

Additional Personal Injury Protection Endorsement - Increases the limits for personal injury protection coverage.  Maximum any one person limit is increased from $50,000 to $150,000.

Automobile Liability – Liability provides protection for loss incurred through legal liability for bodily injury and damage to property of others caused by accidents arising out of ownership, maintenance, or use of an automobile.  Physical damage provides for loss or damage to owned vehicles.

Drive Other Car Coverage - Coverage is needed for business owners who have all their personally titled autos insured under their company’s business auto policy.  Provides liability, medical payments, uninsured/underinsured motorist and physical damage coverage for specifically named individuals while using a non-owned auto for their own personal use.

Drive Other Car (DOC) Liability - A business auto or garage policy endorsement providing liability coverage for named individuals, who do not have a personal auto policy, while driving non-owned autos in situations unrelated to the business of the insured.

Drive Other Car Physical Damage - A business auto or garage policy endorsement providing physical damage coverage for named individuals, who do not have a personal auto policy, while driving non-owned autos in situations unrelated to the business of the insured. 

Garage Liability - This coverage is used to insure against liability claims arising out of your garage operations including the use of automobiles.  Coverage also applies to your products or completed operations exposures subject to a deductible of $100 per claim.

Garage Keepers Liability - Protects against claims arising out damage to vehicles owned by others, which are lift with you for storage, service, safekeeping or repair.  Commonly included in garage policies, it may be written to provide coverage for limited perils or for comprehensive physical damage, with or without collision damage coverage.  Coverage may be expressed as covering the legal liability of the garage keeper or amended to cover on a direct basis, as primary insurance or excess.

Garage Dealers Physical Damage - This coverage protects the dealers’ inventory for physical damage of the property.  This would include coverage on a test drive.

Hired Auto Coverage - Provides coverage for those autos you lease, hire, rent or borrow.  This does not include any auto you lease, hire, rent or borrow from any of your employees or partners or members of their households. 

Hired Car Physical Damage Coverage - Coverage provides excess protection for comprehensive and collision on vehicles that your organization rents on a short-term basis.

Liability Coverage - Protects you against loss if you are held legally responsible for bodily injury to others, or for damage to property of others caused by an accident.

Medical Payments Coverage - Provides coverage for medical bills for you and occupants of your owned automobiles.

Non‑Owned Auto Coverage - Provides coverage for autos you do not own, lease, hire, rent or borrow that are used in connection with your business. This includes autos owned by your employees or partners or members of their households.

Personal Injury Protection (New York No‑Fault) - Provides coverage for injuries to all occupants of the insured vehicle(s) regardless of the fault of the accident.  Covers medical expense, work benefits (80% of monthly earnings up to $2,000 per month for a period of up to 3 years from the date of the accident) and other expenses up to $25 per day for not more than 1 year from the date of accident ‑ maximum any one person $50,000.  An additional $2,000 death benefit is also payable to estate of an injured person.  Payments under personal injury protection are reduced by any recovery available under Workers' Compensation

Physical Damage Coverage - Covers against collision and comprehensive damage to those autos scheduled on your policy for these coverages:

  • Collision is considered to be a collision with another object and upset or overturn of the vehicle.
  • Comprehensive perils include, but are not limited to, breakage of glass, theft, fire, earthquake, windstorm, hail, vandalism and malicious mischief, and flood.  Full glass coverage provided on all private passenger types. (Deductibles ‑ Comprehensive / Collision ‑ Per Schedule)

In the event of a physical damage loss, settlement will be based on the actual cash value of the vehicle.

PIP: Ext Additional, Broad - (Personal Injury Protection) The bodily injury and other automobile insurance coverages required under state no-fault insurance laws.  These benefits may include basic medical expenses, rehabilitation, lost earnings, funeral expenses and survivors’ benefits.

Rental Reimbursement Com’l Veh - An optional auto coverage endorsement to provide reimbursement for the expenses incurred by an insured when a temporary replacement vehicle is needed following a covered accident to the insured's commercial (non ppts) type vehicles

Rental Reimbursement PPT Only - An optional auto coverage endorsement to provide reimbursement for the expenses incurred by an insured when a temporary replacement vehicle is needed following a covered accident to the insured's private passenger type vehicles 

Towing and Labor - Provides reimbursement for towing and labor costs incurred each time a covered auto of the private passenger type is disabled. Limit is $50 per disablement.

Trailer Interchange - It is the transfer of trailer with or without load from one transportation line to another by written agreement.  The agreement requires one trucker to reimburse the other if there are damages to the other’s trailer while in his possession. 

Truckers Liability - Auto liability exposures experienced by owners and operators of businesses designed to transport the goods of others by land motor vehicles for a fee. Subject to regulations by the Department of Transportation (DOT).

Truckers Physical Damage - Provides for loss or damage to owned vehicles.  Typically written on a stated amount basis for specified perils & collision.

Uninsured Motorists Coverage - Pays damages you are legally entitled to receive from an insured or hit and run motorists. We suggest you carry the same limit as your Liability Coverage provides.

Uninsured Motorist Coverage: Primary - Coverage available on your own auto insurance policy to protect you from a loss caused by a negligent driver who does not carry any auto insurance. 

Uninsured Motorist Coverage: Excess - Provides uninsured motorist coverage excess (over) the primary uninsured motorist coverage.

Un-laiden Liability – Provides coverage for the owner operator when not covered under the authority’s primary liability.  Typically coverage is triggered for the owner/operator after the “load” has been released.

Adjuster – An individual that settles a claim filed by an insured. The adjuster evaluates the merits of a claim and determines the proceeds that might be payable for the claim

Benefits – Monetary payments and other services provided by insurers under the terms of an insurance policy.

Claims Reserve – The reserves attributed to an individual outstanding claim. Claims Reserves contrasts with bulk reserves that can not be attributed to an individual claim, but are attributed to all outstanding claims. Claims Reserves are equal to total incurred less net payments (gross payments less subrogation).

Date of Injury (DOI) – The date of the accident that caused the injury.

Employer's First Report of Injury (E-1) – A report that an employer is required to file with its workers' compensation carrier when one of its employees is injured while working.

Independent Medical Examination (IME) – An examination of an injured worker by a physician selected by the insurance company. Independent Medical Examinations are usually done to determine the appropriateness of a course of treatment, or to provide an evaluation of permanent impairment.

Lost Time (or "Time Loss") Claim – A claim in which an injured worker is determined by a doctor to be unable to work for a period of time (in Utah, the period must exceed three days). These claims involve the payment of disability benefits, in addition to medical costs and other expenses.

Maximum Medical Improvement (MMI) – The maximum level of medical improvement of an injured worker's condition. Once a claimant has obtained MMI, it is expected that significant improvements in the future will be minimal.

Medical Case Management – Professional services for the evaluation, monitoring and coordination of medical treatment of claims with specific diagnosis or requiring high-cost or extensive services.

Medical Only Claim – A claim which includes payments for medical expenses only. A medical only claim occurs when the injured worker was not out of work long enough to received compensation for lost wages.

Advertising Injury - Protects you from claims of libel, slander, product disparagement, piracy, infringement of copyrights, etc., that arise out of the advertising of your goods, products or services.

Blanket Contractual Liability - Coverage for bodily injury and property damage due to liability assumed under an "insured contract" as defined in the policy.

Broad Form Property Damage - Coverage is used to modify the General Liability policy's "care, custody or control" and "workmanship" exclusions so that these provisions will only apply to that particular part of the work that causes damage (premises‑operations) or damage to completed work that results from your own work or operations (completed operations).

EFIS – (Exterior Finishing Insulation Systems)  means a non-load bearing exterior cladding or finish system, and all component parts therein, used on any part of any structure, and consisting of: rigid or semi-rigid insulation board made of expanded polystyrene and other materials such as adhesive and/or mechanical fasteners used to attach the insulation board to the substrate; reinforced or non reinforced base coat; finish coat providing surface texture to which color may be added; and any flashing, caulking or sealant used with the system for any purpose.  Typically an excluded exposure.

Employees as Additional Insureds - Coverage is extended under your policy to include your employees in the definition of insured, while acting within the scope of their work‑related duties.

Employee Benefits Liability - This coverage is used to insure against negligent acts, errors or omissions committed by you or any person for whose acts you are legally responsible for while engaging in the management of public employee benefits or private employee benefits plan.  This coverage must be specifically added to your policy.

Fire Legal Liability - Provides $50,000 coverage for fire damage to structures leased to you.  This limit can be increased.

General Liability Insurance - A form of insurance sold to businesses to indemnify the business for third party liability claims due to negligence. Coverage can include premises and operations liability for onsite and job-site accidents and products liability claims for products that injure third parties. 

Host Liquor Liability - Coverage for liability arising out of the serving of alcoholic beverages at meetings or functions incidental to your operations.

Incidental Medical Malpractice - This coverage provides protection against claims arising out of you or your employees rendering or failing to render proper incidental medical assistance.

Independent Contractors - Coverage to protect you against losses caused by the negligence of a subcontractor that you hire.

Personal Injury - Protects you against claims alleging false arrest, libel, slander, malicious prosecution, or wrongful entry or eviction.

Premises Medical Payments - Automatically provides $5,000 per person for medical payments due to accidents on your premises.

Premises Operations - Coverage for claims arising from your ownership, maintenance or use of premises and your operations in progress.

Products / Completed Operations - Coverage for claims arising out of bodily injury and property damage that results from products you have sold or work you have performed, provided the accident occurs away from premises you own or rent.

Products Liability - Products Liability covers third-party bodily injury or property damage occurring somewhere other than your premises from a product your company made, distributed or sold, or a service your business provided.

Product Recall Insurance - Coverage for the costs of recalling a product known, or suspected to be, defective.

Credit Insurance – A form of life and health insurance protecting the lender against loss from death or disability of the borrower, often written as group insurance. The coverage can be written to protect the interest of the creditor only (single interest), or the interests of both creditor and debtor (dual interest). Protection against loss caused by the insolvency of a firm's customers in excess of its normal credit losses; written by a few specialty casualty insurers.

Employee Dishonesty (1st party) - This coverage is used to insure against loss of money, securities or other property belonging to the insured, or for which you are liable, that is caused by employee dishonesty.  It pays for any one loss caused by one or more employees up to the face amount stated on the form. Please note coverage does not include inventory shortage unless you can prove that the loss was sustained through dishonest acts of employees.

Employee Dishonesty (3rd party) - This coverage is used to insure against loss of money, securities or other property belonging to others that is caused by the insured’s employees’ dishonesty.

ERISA - An acronym standing for the 1974 Employee Retirement Income Security Act which regulates certain employee benefit plans.  One of the purposes of this act is to force employers to protect the assets of the business that have been designated as employee pension benefits.

Forgery & Alteration - Indemnifies the insured and banks in which the insured carries a checking or savings account for loss by reason of forgery or alteration of checks, drafts, promissory notes and other described instruments and documents.

Fiduciary Liability Insurance - This insurance covers claims arising from a breach of the responsibilities or duties imposed on a benefit plan administrator, or a negligent act, error, or omission of the administrator.

Money & Securities – Covers money and securities inside the insured's premises or banking premises against theft, disappearance or destruction. Provision is made for similar coverage outside the premises when money and securities are in the custody of a messenger.

E Commerce/E-Business Liability – (Cyberspace/internet liability)—Provides coverage for the exposure of promoting, marketing, and selling products and services over the Internet.

Directors and Officers Liability Insurance - A form of errors and omissions insurance covering the directors and officers of corporation.  Protects officers and directors of a corporation against damages from claims resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation (and even the officers and directors in some cases) for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors. These policies always require the insured to retain part of the risk uninsured.

Employment Related Practices Liability - Coverage against allegations of illegal or discriminatory hiring and firing practices, sexual harassment of employees, and so on.

Accounts Receivable - Insurance against loss of revenue that cannot be collected because accounts receivable records are destroyed by an insured peril.  Coverage commonly includes any extra expense to recapture records and payment of interest on loans needed to cover the interim period reduction in collections.  An insured’s keeping duplicate records in safe storage off premises is highly recommended risk reduction technique-and the cost of coverage is considerably reduced thereby.  Insurance may be arranged to cover electronic records as well as paper.

Bailee Coverage - Insurance designed to provide coverage for the property of customer’s in the bailee’s care, custody, or control, without regard to liability.

Builders Risk - A variation of property coverage specifically applicable to property under construction.  It is commonly written in an amount to cover the value of the structure when completed.  The premium charged takes into account that values at risk increase gradually over the term of the policy.

Cargo - An inland marine or ocean marine policy covering cargo in the care, custody, or control of the carrier.  Transportation may be by truck, rail, air, ship, or boat. 

Computer/EDP - A policy or endorsement that provides protection on equipment, software and extra expenses incurred as a result of failure of such equipment caused by an insured loss and loss of earnings. Coverage may be extended to include liability claims alleging errors and omissions by data processing companies. 

Contractors’ Equipment - Coverage designed for the special needs of contractors to insure their machinery and other equipment.  Examples may be anything from concrete forms, asphalt plants, bulldozers, cherry pickers, and scaffolding, to small hand tools. This equipment is most often protected by inland marine insurance coverages due to its mobile nature.

Installation Floater - Protection for the installer of equipment against loss by specified perils or on an "all-risk" basis to property in the course of installation.

Mobile Equipment - Included for coverage under the commercial general liability form, this term relates to land vehicles used in ways that take them out of an explicit “automobile liability” exposure (e.g., vehicles used only on the insured premises, to carry certain permanently attached equipment, that are not required to be registered, or are designed for solely for off-road use).

Motor Truck Cargo Policy – As a carrier for hire, the insured is protected for legal liability relating to property of others in the course of transit.

Ocean Marine - The protection of ships, their cargoes, and the freight, including protection and indemnity insurance to cover ship-owners' liabilities for loss of life to any person, illness or injury to crew, damage to cargoes carried, and damages to fixed or floating objects. 

Rented/Leased Equipment - Reimburses you for the cost of renting tools or equipment if yours are not available due to a covered loss. 

Signs - This insurance is used to provide coverage for scheduled neon, fluorescent, automatic or mechanical electrical signs or lamps listed in the policy.

Transit or Transportation - Insurance on merchandise and/or cargo while it is being moved and is subject to loss or damage during transportation. Typically referred to coverage applying to the insured’s owned goods.

Valuable Papers - This policy is used to cover valuable papers and records including books, maps, films, drawings, abstracts, deeds and manuscripts, either on a blanket or scheduled basis.  Coverage includes the actual cost of materials and any additional expenses necessary to reproduce these records. 

Warehouse Legal Liability - Covers responsibility for loss or damage to property of others in the insured's warehouse.

Watercraft Liability - Provide liability and/or hull coverage for watercraft owned by you, used by you, or both.  This insurance is similar to your auto policy in that you can select the necessary coverage you need for your particular marine exposures. 

International/Foreign Exposures - Business coverage for companies that conduct business outside the USA. The scope of coverages available may include but are not limited to: premises and product liability, automobile liability, workers compensation and employers liability, property including transit, kidnap and ransom, confiscation and civil war, crime, business interruption, difference in limits and conditions, and endemic disease.

Kidnap-Ransom Insurance - A specialty coverage offered in the surplus and excess lines markets that responds to ransom demands for recovery of kidnap victims.

Travel Accident Insurance - A type of life or accident policy sold at airports, bus stations and railroads to provide coverage for bodily injury, accidents or death suffered by passengers while traveling on the aircraft, bus or railroad. The coverage may be sold by ticket agents or in vending machines. 

Liquor Liability - Liability coverage for owners and operators of establishments selling or serving alcoholic beverages.

Owners and Contractors Protective Liability Insurance (OCP) - Insures the legal liability of contractors and others for the negligent acts of independent contractors engaged by them and in some cases, for their own negligent supervision of the work performed.

Terrorism - Insurance coverage or policies designed to protect an insured against damage caused by terrorist acts.

Pollution Liability Insurance(1st Party) - Coverage for the insured for damages to own property  caused by a “pollution incident.” Typically referred to as clean up costs.

Pollution Liability Insurance(3rd Party) - Coverage for bodily injury or property damage to others caused by a “pollution incident.”

Errors or Omissions Liability - A type of professional liability insurance, protecting the insured against claims alleging a bodily injury, property damage, or financial loss caused by the negligence in the performance of professional services (wrongful act)  A form of errors and omissions insurance, (sometimes called “malpractice” coverage for errors alleged against those in the healing and legal professions).  Arbitrarily it seems, “errors and omissions” is the term applied most often to insurance covering liability for mistakes in matter affecting property, i.e., coverage for “Insurance Agents E&O,” “Architects E&O’ while “professional liability” is used in reference to coverages such as “Druggists Professional Liability,” Physicians and Surgeons Professional Liability,” and “Lawyers Professional Liability.”

Professional Liability - A type of professional liability insurance, protecting the insured against claims alleging a bodily injury or property damage loss caused by the negligence in the performance of professional services (wrongful act).  A form of errors and omissions insurance, (sometimes called “malpractice” coverage for errors alleged against those in the healing and legal professions).  Arbitrarily it seems, “errors and omissions” is the term applied most often to insurance covering liability for mistakes in matter affecting property, i.e., coverage for “Insurance Agents E&O,” “Architects E&O’ while “professional liability” is used in reference to coverages such as “Druggists Professional Liability,” Physicians and Surgeons Professional Liability,” and “Lawyers Professional Liability.”

Actual Cash Value Valuation - This valuation method pays for the cost to repair or replace damaged property with like kind and quality, less reasonable deductions for wear and tear, deterioration and economic obsolescence.

Agreed Value Valuation - This coverage is used to remove the coinsurance requirement for covered property.  With it your company agrees that the amount of coverage purchased is adequate, and any coinsurance requirements are waived if the limit of insurance equals the agreed value. 

Basic Causes of Loss - Protection for the following causes of loss:  fire, lightning, explosion, windstorm, hail smoke (except from agricultural smudging or industrial operations), aircraft, vehicles, riot, civil commotion, vandalism, sprinkler leakage, sinkhole collapse and volcanic action.

Blanket Coverage - A single limit of insurance that applies to two or more property items at one location, or to two or more kinds of property at several locations.  It allows you to shift property values with no impairment of recovery, as long as the total amount of insurance carried complies with the coinsurance requirement stated in the policy.

Boiler & Machinery Insurance - Fired vessels, steam generators, mechanical and or electrical objects and turbines, are all examples of “objects” that might be listed for coverage under a boiler and machinery policy.  Coverage is for damage to covered property caused by an accident to an object identified in the policy’s schedule.  Coverage includes extra expense, automatic 90-day coverage at new locations, defense against liability claims, and supplementary payments like those provided under public liability policies.  Also known as equipment breakdown.

Broad Causes of Loss - Protection for the following causes of loss:  fire, lightning, explosion, windstorm, hail smoke (except from agricultural smudging or industrial operations), aircraft, vehicles, riot, civil commotion, vandalism, sprinkler leakage, sinkhole collapse. volcanic action, breakage of glass, falling objects, weight of snow, ice or sleet (except for damage to gutters, downspouts or personal property outside of buildings) and limited water damage.

Buildings - Permanent structures listed on the policy including completed additions, permanently installed fixtures, machinery and equipment, outdoor fixtures, owned personal property used to service, repair or maintain the building and additions under construction or repair.

Buildings Insurance - "First-party" insurance of real and personal property against physical loss or damage, not to be confused with property damage liability insurance.

Business Income - A time element coverage which pays for loss of earnings or income when business operations are interrupted, curtailed or suspended due to property loss as a result of an insured cause of loss. Also covered are losses of rent and rental value. Extra expenses incurred to continue operations at another location are included as long as they reduce the total amount of loss

Business Income Including Extra Expense - Coverage used to insure against loss of income (including any continuing normal operating expenses) that you experience because of a suspension of your business when insured property has been damaged by a covered peril.  Extra Expenses are included and Rental Values can be added as an option.

Building Ordinance or Law - A property endorsement which provides the insured the option to purchase coverage for three types of common building ordinance or law requirements that apply after an insured has suffered a physical damage loss such as fire. These ordinance or law damages are normally excluded in standard property coverage forms. The coverages available in this endorsement are cost to demolish the undamaged portion of the building, cost to replace with superior construction as required by law, and cost to clear the land of debris after demolition.

Business Personal Property - Includes most property, other than real property, used in connection with the insured’s business operations.

Coinsurance - Clause requiring that the limit of coverage be a minimum percentage (usually 80%) of the insurable value of your property.  If the amount of insurance carried is less than what is required by this clause, any claim payment may be reduced by the same percentage as the deficiency.

Deductible - The amount that will be deducted from any payment made to you because of a covered loss.

Demolition Cost - The cost that it takes to demolish the undamaged portion of the building because of an ordinance or law. 

Difference In Conditions (DIC) - Property insurance obtained through the excess and surplus lines market to supplement and expand on the property coverage available through admitted markets. 

Earthquake Coverage - Protection for loss due to earth movement including earthquake shocks and volcanic eruption.

Earth Movement - Subject to exclusion in property policies, this peril includes earthquake, landslide, mudflow, etc.

Extra expense insurance - Depending on an insured’s requirements, this coverage can be had as a supplement to business income insurance, applying to expediting expenses that aid in quickly restoring the insured’s operations after a covered loss, or it can be the primary coverage sustaining the extra cost of continuing doing business for those insureds who would find it extremely damaging to fail to meet customer commitments, e.g., newspapers, dairies, etc.

Flood Coverage - Protection against loss due to water damage arising from flooding, surface water, tides, tidal waves, and the overflow of any body of water.

Flood Insurance: Excess – Provides flood coverage excess (over) the primary flood coverage.

Flood Insurance: Primary - Coverage against damage done by the rising or overflowing of bodies of water.  Flood insurance, like earthquake coverage, is usually only of interest to those relatively few whose property is exposed.  Consequently, losses among this small group will be high and premiums can be prohibitive.  However, in 1968 the Federal government stepped in to help property owners in designated “flood plains” with the National Flood Insurance Act of 1968.  Coverage is not only available, but may even be required to obtain financing for exposed properties.

Glass Insurance - Coverage against the breakage of glass and frames. Check with your insured if there are any obstructions, which would prevent repair, such as lettering on the glass surface or ornamentation.

Increased Cost of Construction - Pays increased costs required by law to repair or reconstruct damaged and undamaged parts of the building.  It also covers undamaged parts of a building that are not subject to a demolition order.  

Leaseholders Interest Insurance - The insurable interest is that of a tenant who has some years remaining under a favorable lease that is subject to termination upon significant damage to the leased property.

Mold/Fungi – Typically not covered under standard policies.  Specialty insurance needed to provide coverage, either direct damage to owned property or third party claims for bodily injury or property damage.

Off Premises Power Interruption - Property and time element endorsements designed to cover the insured for losses that result from the interruption of services by an insured cause of loss. The current endorsements allow the insured to select coverage for off-premises services, whether supplied by a private or public utility. Protection may be purchased for the following options, including water suppliers, communication suppliers, or power supplies.

Overhead Transmission Lines - This coverage is the excluded coverage part of the off premises power interruption coverage that allows you to insure for losses caused by damage to overhead transmission lines.

Personal Property - Personal property owned by your firm and used in your operations.  Furniture and fixtures, equipment and machinery, raw stock, and finished goods all fall within this category.

Personal Property of Others - Covers personal property of others who are not insureds that is in the insured’s care, custody or control.

Rental Income - Insurance which reimburses a building owner against loss of rental income if the building is not usable by a tenant because of some cause of loss insured against. No longer a separate coverage form by itself; now incorporated into the inclusive business income coverage form.

Replacement Cost Valuation - This loss valuation method pays for the cost to repair or replace damaged items with like kind and quality without deduction for depreciation.  This is important since you could face a substantial loss if you must replace property at today’s prices but receive only the depreciated value of the property that was destroyed.

Special Causes of Loss - Protection against direct loss arising from any cause not specifically excluded.  The advantage of this form is that the insurance company must prove that a loss is specifically excluded in order to deny coverage under the policy. 

Spoilage - Also called temperature change coverage protects perishable stock you have on your premises in case of damage caused by a temperature change due to an equipment breakdown or power failure.

Subsidence - This is protection if the land or property shifts underground and affects your property. 

Tenants Betterments & Improvements - Fixtures, alterations, installations, or additions that a tenant acquired or made at his or her own expense.  They are part of the building or structure occupied by the tenant and cannot be legally removed. 

Umbrella Liability - A liability contact with high limits covering over top of primary liability coverages and, subject to a deductible, covering exposures otherwise uninsured.

Excess Liability - A liability contact with high limits covering over top of primary liability coverages.

Aggregate Limit – The maximum amount an insurer will pay for all claims covered by a policy during a policy period.

Employers Liability – Employers liability Insurance applies to bodily injury by accident or bodily injury by disease. Bodily injury includes resulting death.  The bodily injury must arise out of and in the course of the injured employee’s employment by you. 

Excess Employers Liability - Provides excess liability protection for employers for damages arising from employment related accidents or diseases.  This coverage also applies if your business is sued by a third party affected by a workplace injury, such as a family member of the injured worker.

Indemnity – Compensation for a loss.

Jones Act - Allows injured sailors to obtain damages from their employers for the negligence of the ship owner, the captain, or fellow members of the crew.

Losses Incurred – An amount representing the losses paid plus the change (positive or negative) in outstanding loss reserves within a given period of time.  On the annual financial statement, Losses Incurred is the loss paid during the year plus the loss reserves at the end of the year less the loss reserves at the beginning of the year. 

Other States - Includes coverage for the states listed on the policy if an employee enters into that state for his/her job. 

Preferred Provider Organization (PPO) – A formally organized entity consisting of hospitals, physicians, and other healthcare providers. A PPO allows insurance companies to negotiate directly for healthcare services at lower price than would normally be charged.  Insurance companies recommend the PPOs they have negotiated with to the insured’s.

Reserves – Insurance company funds set aside to meet future obligations.

Self Insurance – Protecting against losses by setting aside a company’s own money, rather than purchasing an insurance policy.  By being self insured, a company saves expenses that an insurance company charges for acquisition, premium tax, and general overhead.  Often self insured companies use a third party administrator to administer its claims.

Stop Gap Liability - Provides employers liability coverage for exposure in monopolistic states (ND, OH, WA, WV, & WY)

Total Incurred Loss – An amount that represents the current expected payout on a claim over the life of the claim.  Incurred loss is equal to net paid losses (paid losses less recoveries) plus reserves.

US Longshore/Harborworkers - Protect employees engaged in maritime employment or employed, in whole or in part, on navigable waterways in the United States including piers, terminals, docks and other areas used for loading or unloading, or repairing of vessels.

Workers Compensation - Protection which provides 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 provided.

Workers Compensation Unit Report – A statistical report that provides information about payroll, premium and losses for a specific policy and state.  Unit Reports are used to calculate e-mods for a policyholder.  The Units Reports are submitted to the NCCI, or other rating organizations.