Terms and Definitions
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Accounts Receivable
Coverage
This insurance is used to reimburse you
when customer accounts are rendered uncollectible because of a
loss by a covered peril.
Actual Cash Value Valuation
(ACV)
This valuation method is used to pay for
the cost to replace or rebuild damaged property, less
depreciation
Additional
Insured
This endorsement is used to extend your
commercial general liability policy to include protection for
those additional listed individuals or entities as respects
their liability that arises out of your operations or premises
owned or rented by you.
Aggregate
Limits
This is the total
limit of coverage that is available to you for all claims
under the policy during the policy year.
Agreed Value (Agreed
Amount) Valuation
This valuation method is used to remove
the application of the standard coinsurance requirements for
specified covered property. With it, your insurance
company agrees that the amount of coverage you purchased is
adequate, and any applicable coinsurance requirements are
waived if the limit of insurance equals the agreed
value.
Ammonia
Contamination Coverage
This coverage is used to insure you
against loss resulting from ammonia contamination when caused
by an accident to a covered object.
Automobile
Liability
This coverage is used to protect you
against claims resulting from bodily injury and property
damage that arises from the ownership, maintenance or use of
any covered auto.
Automobile Physical
Damage
This coverage is used to protect a
covered vehicle itself. It pays for physical damage
loss that results from a covered
peril.
Blanket
Insurance
This form allows for a single limit of
insurance to apply to two or more property items at one
location, or to two or more kinds of property at several
locations. Blanketing of coverage
allows you the ability to shift property values with no
impairment of recovery, as long as the total amount of
insurance carried by you complies with the coinsurance
requirements in the form.
Broadened All Risks
Perils Coverage
This extension is used to broaden
standard special causes of loss coverage to include protection
for those additional perils listed in your
policy.
Building
Coverage
This term describes the real property
items covered under your property policy.
This coverage includes the building(s) or structure(s)
as well as completed additions, fixtures, machinery and
equipment, and property used to service and maintain the
insured building(s) and premises.
The form also extends to additions under construction,
alterations, and repairs including materials within 100 feet
of the premises.
Building Glass
Coverage
This coverage is used to provide extended
protection for premises glass. Limited coverage is
provided in your property policy, but the additional coverage
is needed to ensure that adequate insurance is
available.
Building Ordinance
Coverage
This coverage reimburses you for the
additional cost to rebuild or demolish a building damaged by a
covered peril when it is required by existing building or
zoning laws. Coverage for the loss of
any undamaged portion of such buildings can also be insured
with this insurance.
Business Income for
Dependent Properties
This coverage is used to insure you
against the drop-off of revenue and/or the extra costs of
obtaining services or supplies that arises out of the loss or
damage to a non-owned and scheduled
property.
Business Income with
Extra Expense Coverage
This insurance is used to cover the loss
of income that results from the suspension of business when
your property has been damaged by a covered peril.
Under this form, extra expense and rental value
insurance are also included without monthly
limitations.
Business Personal
Property
This term is used to
describe the types of personal property that are insured under
your property policy. Such Property is defined as
business personal property located at or within 100 feet of
the described premises consisting of furniture and fixtures,
machinery and equipment, stock, leased personal property,
interest in tenant improvements and betterments and personal
property of others while in your company’s care, custody or
control.
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Claims-Made Form
This type of policy will provide
protection for only those claims reported or first made during
the policy period or during any previous period that is stated
in the prior acts or retroactive date option of the
policy.
Coinsurance
This policy
provision specifies in minimum percentage of insurable value
that you must carry on a covered property item.
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.
Collision
Coverage
This coverage is used to insure against
loss or damage to a covered vehicle that results from
collision or upset.
Comprehensive Perils
Coverage
This coverage is used to insure against
loss or damage to a covered vehicle resulting from loss
excluding collision or upset, wear and tear, freezing,
mechanical or electrical breakdown, or blowouts, punctures or
other road damage to tires.
Computer
Fraud
This insurance is used to protect you
against loss or damage to money, securities or other property
due to computer fraud. Computer fraud is defined
as “theft of tangible property by and directly related to the
use of a computer”.
Computer Virus
Coverage
This coverage is
used to protect against loss of media or other data that
results from vandalism (except by employees) when caused by
the introduction of a hostile program into your company’s
computer system.
Contractual
Liability Coverage
This coverage is used to insure against
bodily injury and property damage claims arising out of the
liability of others that you assume in an “insured contract”
as defined in your general liability policy.
Debris Removal
Clause
This clause
specifies the amount of coverage that is available to you for
debris removal costs resulting from a covered loss under your
property policy. Standard coverage provides
for up to a maximum of 25 percent of the amount paid for such
damaged property.
Deductible
This policy provision specifies the
amount that will be deducted from any payment made to you
because of a covered loss to insured property.
Dies, Patterns and
Molds Floater
This insurance is used to insure the
dies, patterns, molds or forms of yours, or similar property
of others that is in your care, custody or control.
Directors and
Officers Liability
This insurance is
used to protect against claims arising from negligent acts,
errors or omissions alleged to have been committed by present
or former directions or officers of your
corporation.
Driver Other Cars
Coverage
This coverage is used to extend your auto
policy to insure individuals, other than named insured, when
they borrow or rent cars in their name and do not have the
protection of a personal auto policy.
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Earthquake Coverage
This coverage is
used to provide you with protection for loss due to earth
movement including earthquake shocks and volcanic
eruption.
Electrical Damage
Coverage
This coverage
extends your policy to provide protection against loss due to
short circuit, blow out or other electrical disturbances.
Employee Benefits
Liability
This insurance is used to protect against
acts, errors or omissions committed by you while engaging in
the management of your company’s employee benefits plan.
Employee
Dishonesty
This coverage is used to insure against
loss of money, securities or other property belonging to your
company, or for which your company is liable, when caused by
employee dishonesty. The form pays up to the
face amount stated in the policy for any one loss caused by
one or more employees.
Employers
Liability
This insurance is used to protect your
company against bodily injury claims by employees that are not
covered under your workers compensation insurance.
Employment-Related Practices
Coverage
This insurance is
used to protect you against lawsuits by employees alleging
wrongful discharge, discrimination, harassment or other
specified employment related exposures.
Excess
Policy
This type of policy
provides higher limits of protection but only for those
hazards as specified in your underlying excess/umbrella
policy(s) schedules.
Explosion Collapse
or Underground Exclusion
This term refers to three exposures that
are sometimes excluded from coverage in some general liability
policies.
Extended Period of
Indemnity Option
This option is used to extend the time of
recovery, after you resume operations, to the period of time
as stated in your policy. It covers the reduction in
income when you require additional time to return to normal
business levels.
Extra Expense
Coverage
This insurance is used to pay for the
necessary additional expenses needed to continue business when
a covered loss damages or destroys your insured property.
Fellow Employee
Coverage
This endorsement is used to extend your
standard liability, auto and umbrella policies to include
protection when an employee is sued by another employee.
It provides similar protection for your employees as
employer’s liability does for you.
Fine Arts
Floater
The insurance is used to insure valuable
paintings or other works of art that need to be insured on
an
“agreed value” basis.
Fire Damage
Liability
This coverage is used to insure against
loss to a premises leased or rented by you when caused by the
peril of fire.
First Dollar
Defense
This provision
specifies that your excess/umbrella policy will pay for costs
associated with claims defense from the first dollar incurred
without first applying your retention limit.
Flood
Insurance
This coverage is designed to insure
against loss due to flooding including overflows of inland or
tidal waters, rapid accumulation or runoff of surface water,
collapse of land because of flooding,
mudslides or mudflows that are caused by flooding.
Forgery or
Alteration
This insurance is used to protect against
loss resulting from forgery of checks, drafts, notes or other
similar written promises prepared by your company or its
agents. The form does not however
cover dishonest acts of employees, which must be insured by
employee dishonesty coverage.
Functional
Replacement Cost Valuation
This
valuation method pays for the cost to replace specified
property with equivalent property that performs the same
function. This can be of lessor or
greater value that the property that was
destroyed.
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Hired Automobile
This
coverage is used to protect against claims arising out of the
use of vehicles leased, hired, rented, or borrowed by your
company or its employees while in the course of
business.
Improvements and
Betterments
This
term is used to describe the additions that a tenant makes at
his own expense to improve rented property.
Inflation Guard
(Automatic Increase) Protection
This coverage is used to automatically
increase the limits of insurance on covered property by a
predetermined percentage at regular intervals.
Its purpose is to reduce the risk that inflation will
lead to coinsurance penalties and
under-insurance.
Installation
Floater
This insurance is used to cover materials
and equipment that are to be installed as property
improvements, alterations or repairs.
Coverage is provided for such property while it is in
transit, and during installation and testing at a covered job
site. The form can be used to
insure your property as well as the property of others that is
in your care, custody or control.
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Mechanical Breakdown Coverage
This coverage
extends your policy to provide protection against loss due
mechanical breakdown of your equipment.
Media
Coverage
This coverage is
used to insure against loss or damage of electronic media
which results in additional costs to reproduce such
data.
Medical
Payments
This coverage is used to reimburse all
reasonable medical expenses incurred by persons as a result of
bodily injury sustained by accident without regard to your
company’s liability.
Non-Owned
Automobile
This type of coverage is used to provide
liability protection for autos used in your company’s business
that are not owned, leased, hired, rented or borrowed.
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Occurrence Form
This type of policy is used to provide
coverage for claims arising out of an accident which results
in bodily injury or property damage that is neither expected
nor intended. The form covers such claims
that occur during the policy irrespective of when the claim is
made against you.
Ocean Marine Cargo
Coverage
This policy is used to provide coverage
for property you ship overseas.
Off-Premises Power
Interruption Coverage
This coverage is
used to protect against loss that results because of an
interruption of power, power surge, blackout, or brownout that
results from an event away from a coverage
location.
Off Premises
Power Services – Direct Damage
This coverage is used to insure against
damage resulting from an interruption of services by a
facility that provides you with power, water or communications
that is caused by a covered peril.
Off- Premises Power
Services – Indirect Coverage
This coverage is used to insure you
against loss of income that results from the shutdown of your
operations because of the interruption of services that supply
you with water, power or communication by a covered loss.
Ordinary Payroll
Limitation Endorsement
The endorsement modifies your business
income coverage so that ordinary payroll is excluded or
limited when figuring the values required to comply with the
coinsurance provision of the form.
In essence, this endorsement allows for lower figures
to be used when determining required insurable values, thus
resulting in lower premium costs for you.
Peak Season
Protection
This option is used to provide higher
amounts of insurance for specific periods of time during the
year as indicated by the dates in your policy.
Personal Effects of
owners and Employees Coverage
This extension is used to provide
coverage for the personal effects of owners and employees for
the limits and perils as specified in your policy.
Personal Injury
Liability
This insurance is used to broadened the
definition of a covered loss to provide coverage for claims
resulting from libel, slander, false arrest, malicious
prosecution, and wrongful entry and eviction.
Personal Property
In-Transit Coverage
This extension is used to provide
coverage for your business personal property while in transit
for the limits and perils as specified in your policy.
Personal Property of
Others Coverage
This extension is used to provide
coverage for the personal property of others that is in your
care, custody or control for the limits and perils as
specified in your policy.
Personal Property
Off-Premises Coverage
This extension is used to provide
coverage for your business personal property while located
temporarily at a premises you do not own, lease or operate for
the limits and perils as specified in your policy.
Please note that this extension does not apply for
covered property while in or on a vehicle, in the care of your
salespersons, or at any fair or exhibition.
Pollutant clean-up
Expense
This clause specifies the amount of
coverage that is available for pollutant clean-up costs
resulting from a covered loss.
Pollution Liability
Insurance
This insurance is used to insure against
claims resulting from the contamination of the
environment.
Product Tampering/Extortion
This insurance is
used to provide specific protection against costs associated
with third party tapering with or threatening to tamper with
your products.
Production Equipment
Included
This term refers to the option of
including or excluding coverage for production related
equipment in a boiler and machinery policy.
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Rental Reimbursement
This coverage is used to pay for rental
charges incurred if your company temporarily loses the use of
a vehicle due to a covered loss.
Rents
Insurance
This coverage is used to reimburse you
for loss of rental income when damage is done to your rental
properties by a covered peril.
Replacement Cost
Valuation
This valuation
method is used to pay for the cost to repair or replace
damaged items with like kind and quality without deduction for
depreciation.
Reporting
Form
This policy is used to insure personal
property when values fluctuate over time or shift between
various locations. The limit of insurance is
set high enough to cover your maximum potential for loss as
stated in daily, weekly, monthly or quarterly reports made to
your insuring carrier. Coverage can also be
provided for acquired and incidental locations if listed on
the form.
Retention
Limit
This is the cost of a claim that must be
“retained” by you prior to the activation of payments of your
excess/umbrella policy. Very similar to a policy
deductible
Salespersons
Samples
The coverage is used to insure samples of
goods while in the care of a salesperson away from your
premises.
Selling Price
Coverage
This coverage is used to extend your
property policy to insure both the cost of your stock and
normal profit in case of loss. It is added because, even
with replacement cost coverage, most property forms are
normally written to only pay for the cost to recreate or
purchase the lost product without reimbursement for normal
profit.
Special Causes of
Loss Coverage
This term refers to the perils coverage
provided with the causes of loss- special form.
Under this insurance, coverage is provided against
direct loss arising from any cause not specifically
excluded. The advantage of this form
is that your insurance company must prove that a loss is
specifically excluded in order to deny coverage under your
policy
Stop Gap
Protection
This coverage is
used to provide employer’s liability coverage for your
operations that are conducted in a monopolistic fund
state. It is needed because
workers compensation policies written by state funds to not
provide employer’s liability coverage.
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Theft, Disappearance and Destruction
Money & Securities
This insurance is used to protect you
against loss of money and securities caused by theft,
disappearance or destruction while located inside or outside a
covered premises. It also covers damage to
the premises that results from actual or attempted theft.
Towing
Coverage
This coverage is
used to reimburse your company for each disablement caused by
a covered peril.
Transportation
Floater
This policy is used to insure property
while in transit to you or while enroute to your customer by a
common carrier.
Umbrella
Policy
This is the broadest
form of excess insurance that is used to provide coverage in
one of three ways including: (1) as additional limits of
protection over the coverage listed in the underlying
schedule, (2) as primary coverage if the underlying limits are
exhausted and (3) to provide coverage for some risks, subject
to a retention, when primary coverage does not.
Underinsured
Motorist Protection
This coverage is
used to pay for all sums that your company is legally entitled
to have recovered from a third party but was unable to collect
because the third party was underinsured.
Uninsured Motorist
Protection
This coverage is
used to pay for all sums that your company is legally entitled
to have recovered from a third party but were unable to
collect because the third part was uninsured.
Valuable Papers and
Records Coverage
This coverage is used to insure valuable
papers and records including books, maps, films, drawings,
documents, abstracts, deeds and manuscripts.
Coverage includes the actual cost of materials and any
additional expenses necessary to reproduce these records
Vendors
Endorsement
This endorsement is used to extend your
products liability coverage to include vendors of your
company’s product(s). It’s purpose is to provide
additional protection above standard products liability
limits, or to afford at least limited coverage where the
availability or cost of products liability insurance is
prohibitive.
Waiting
Period
This policy provision specifies the
minimum period of time you must wait until coverage goes into
effect. It is a form of deductible
that is used with your business interruption coverage.
Worldwide
Coverage
This provision
specifies that your excess/umbrella policy is written to
provide coverage for suits originating outside of the United
States.
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