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Accident
1) An unusual, fortuitous, unexpected or unforeseen event or occurrence.
2) A mishap that is not expected or designed.
Accident and Health
(Sickness) Insurance
A form of insurance compensating an individual for loss as a result of an
accident or illness. It may pay certain or all expenses for medical and
similar services and a weekly or monthly indemnity for loss of income. The
amounts and items covered vary from policy to policy and depend to some
extent on what coverage is purchased by the insured.
Act of God
A direct, violent sudden act of nature that could not have been foreseen,
or if foreseen, its effect could not have been prevented, e.g., flood,
earthquake.
Actual Cash Value
The fair market value of property taking into account factors that might
augment or reduce the value of the property in question.
Additional Living
Expense Insurance
Coverage applicable when an insured's dwelling is damaged by an insured
peril to such an extent that one cannot live in it until repaired. This
insurance pays the extra amount it costs to live elsewhere until repairs
are made, such as the cost of living in a hotel.
Agent
1) A person who is employed to act on behalf of another.
2) An insurance agent is one who contracts with one or more insurance
companies to sell their insurance policies to the public and is paid a
commission on or receives compensation for such business. See also Broker.
All Risk Policy
A name given to an insurance policy which covers against the loss caused
by all perils except those which are specifically excluded by the terms of
the policy. Frequently, a policy of insurance is written to insure damage
to property caused by specific "named perils," which are listed on the
policy. However, policies may be issued in certain cases to insure against
"all risks of loss or damage" and are then called "all risks" policies.
The term excludes insurance against certain hazards.
Amount of Insurance
The limit of payment for which an insurer is liable under a policy.
Applicant
The person or firm requesting insurance.
Application
A request for insurance. This may be done verbally, in writing or by using
a printed form.
Appraisal
A valuation or an estimation of the value of property usually done by an
expert in that field who has no personal interest in the property.
Appraisal Clause
A clause in an insurance policy that gives the insurer the right to demand
an appraisal on the damaged property. It gives both the insurer and
insured a means of settling disputes over the value of lost or damaged
property.
Appraiser
Person who because of special knowledge is vested with authority in
determining the real value of property or damage.
Appurtenances
That which belongs to something else, e.g., appurtenances of automobile.
The term "appurtenances" means that one thing belongs to another thing,
that the two will remain in relationship, and will pass with the
ownership.
Arbitration
Reference of a dispute to one or more impartial persons chosen by the
parties to the dispute to determine their rights and/or obligations. The
parties agree in advance to abide by the arbitrament. Each party has a
chance to be heard.
Arson
At common law, the deliberate and intentional burning of property by its
owner or by another person.
Attest
1) The witnessing of signatures. Where a document is signed a witness who
has seen the document signed before him may "attest" that the signatures
on the document are genuine.
2) Audited financial statements are said to be "Attested," i.e. the
auditor attests the corporation's representations.
Audit
1) An examination of evidential matters to determine the reliability of a
record or assertion.
2) In connection with financial statements a review of the accounting
records and other supporting evidence of an individual or an organization
to assess the reasonableness of the statements as presented (not a
guarantee of accuracy).
Automatic
Reinstatement
After a claim has been paid or the property restored, most policies
automatically return the stated limit of insurance to its original amount.
Automobile Insurance
Insurance coverage that provides indemnity and/or compensation for injury
or physical damage which ensues from the ownership, use or operation of an
automobile.
Bailee
In contract and property law one to whom goods or property are entrusted
for a stated purpose. Can be either gratuitous (for no consideration) or
for hire (for consideration).
Bailment
The act of placing goods in the possession of a bailee.
Bailor
A person entrusting goods to another.
Balance Sheet
Financial statement showing assets, liabilities and equity of a company.
Basic Premium
A starting charge made to which is added the premium developed by the
application of rates as directed.
Betterment
Physical improvements beyond mere maintenance or repairs that augment the
value of a property .
Binder
A written or oral agreement given by an insurer to insure a risk, pending
the issue of a policy. A binder is deemed to be the policy and must be
cancelled in the same manner.
Blanket Crime Policy
An individual policy covering several crime perils on a single amount
rather than on individual limits.
Blanket Policy
(Insurance)
Insurance on two or more items, or locations, in one aggregate sum insured
without separate amounts for each item.
Boiler and Machinery
Insurance
Coverage that indemnifies in the event of loss with respect to and arising
from the ownership, use and operation of boilers, pressure vessels and
machinery.
Brick Veneer
Construction
Frame construction with a single course of brick as an outside covering.
Broker
An independent person or firm who acts on behalf of the insured in placing
business with insurance companies.
Builders Risk
Insurance
Insurance coverage on property under construction including loss to
buildings or ships, including machinery and equipment, under course of
construction, and materials incidental to construction.
Building Codes
Rules and regulations of governmental bodies defining standards that
construction in that jurisdiction must meet.
Burglar Alarms
Devices of various types which give warning of entry into premises by
unauthorized persons.
Burglary
Unlawful removal of property from premises involving visible forcible
entry.
Burglary Insurance
Insurance against loss of property caused by burglars.
Business Insurance
A form of insurance to protect a business against the loss of services of
a key employee or employees. Usually accident and sickness, however, life
insurance may also form part of the package. Also called Partnership
Insurance or Corporation Insurance.
Business Interruption
Insurance
Various types of insurance against business expenses and loss of income
resulting from a fire or other insured peril.
By-law
A law or ordinance dealing with matters of local or internal regulation
made by a local authority or by a corporation or association.
By-law Endorsement
An endorsement explaining how a particular insurance company deals with a
claim which is affected by a local by-law.
Care, Custody and
Control
A term used primarily in liability coverages which refers to property
belonging to another but which is legally in the insured's possession or
under his control.
Cargo
Goods being transported, such as the load of a truck or the goods being
carried by a ship. The cargo of a ship does not include the equipment
needed to operate the ship.
Cash Surrender Value
When an insured wishes to cancel a life insurance policy before the full
term, the policy may have a cash value which is stipulated in the policy.
The longer the policy is in force, the higher the cash value is likely to
be. It is a sum paid back by the life insurance company to the insured
when an insured requests the termination of the policy.
Casualty Insurance
Loosely used to describe an area of insurance not particularly or directly
concerned with life insurance, fire insurance or automobile insurance.
Most frequently refers to liability, burglary and plate glass insurance
but may include Fidelity and Surety.
Cede
An insurer cedes part of a risk to a reinsurer when it transfers or
reinsures part of the risk.
Certified Copy
Reproduction of a document, that authority having custody of original
signs and attests as a true, genuine and authentic copy.
Canadian Chartered
Insurance Broker (C.C.I.B.)
A professional designation earned by examination following study courses.
Chartered Insurance
Professional (C.I.P.)
A professional designation (Canada) earned by the successful completion
of several educational requirements as designated by the Insurance
Institute of Canada.
C.C.I.B.
See Chartered Insurance Broker.
C.I.P
See Chartered Insurance
Professional.
Civil Code
1) The civil law of the Province of Quebec.
2) The reduction of law to a set of rules. In some countries for example,
France, most of the laws of the country were at one time reduced to a set
of rules after the style of the Roman Code although these too have
subsequently been subject to certain new statutes. In some jurisdictions,
certain sections of the law are reduced and simplified to a "Civil Code."
Civil Commotion
Disturbance involving a large number of individuals. An uprising of people
creating a prolonged disturbance.
Claim
Strictly speaking, a claim is the exercising of the right of an insured to
be indemnified by his insurance company for damage suffered. It is
frequently used, however, to indicate the amount of the claim.
In practice, it is any notification of a possible loss under an insurance
policy whether any payment is likely to follow or not.
For every claim that is reported, the insurance company must set aside
reserves equal to the figure which it is anticipated the claim will cost.
Claimant
One who makes a claim.
Claims Examiner
An employee of an insurer who handles and is responsible for incoming
claims.
Claims Made Basis
Provision in some insurance and reinsurance contracts covering only claims
made during term of the contract.
Clause
Words in a policy which describe certain specifications, limitations or
modifications.
Co-insurance Clause
A clause in an insurance policy requiring an insured to carry a certain
percentage, usually 80, 90 or 100 per cent of insurance in relation to the
value of the property insured. If the insured fails to do this, then he
agrees to be a self-insurer of all losses large or small in the same ratio
as his failure to comply with the percentage required, is related to the
insurance required. For example, a building valued at $100,000 with an 80
per cent co-insurance clause would require insurance coverage of $80,000.
If coverage is carried for only $40,000 then the insured is a self-insurer
or coinsurer for $40,000 of the $80,000, and the insurance company would
be responsible for the same amount. This ratio would apply even if a loss
were only $5,000. Then the insurance company would pay $2,500 and the
balance or coinsurance penalty of $2,500 would be borne by the insured.
Co-insurer
Two or more persons or companies who may be sharing a loss. A company
whose policy covers the same risk as that of one or more other companies,
is a co-insurer whether the policies are written separately or together.
Collapse
Falling in of a building.
Collision
A vehicle or a ship collides when it strikes another object or another
vehicle or ship. Collision insurance insures against loss so caused.
Collusion
A secret agreement between persons to defraud another, e.g., an insured
driver of an automobile and his passenger may misrepresent the facts of an
accident in order to have monies paid to the passenger under the insured's
automobile insurance policy.
Commercial Property
Floater
Property used in a business which requires it to be moved from place to
place, may be insured on one of the forms of commercial property floaters.
A television studio, for example, may require insurance on their equipment
even though it may be out of the regular studio much of the time. In most
instances, these are written on special forms suited to the particular
need such as contractor's equipment floater, inland marine block policy,
jeweler's block policy, salesman's floater policy, etc.
Common Carrier
One who offers to transport merchandise for hire and must accept shipments
from anyone who wishes to use the services. Different laws and rules
govern common carriers than do private or contract carriers who only
transport the goods of those with whom they have made agreements.
Common Law
American, Canadian and British law derives its force and authority from
the universal consent and practice of the people over the years. Certain
aspects of the law are written into statutes. The underlying principles
and usages and rules of action which do not rest for their authority on
this statutory or legislative law are to be found in principles set forth
by decisions of the Courts over the years.
Many rules were promulgated in feudal times. During the reign of Henry II
(beginning 1154 AD) the King's Courts became organized and common law
began to evolve. The Courts met frequently and when one Court made a
decision in connection with a certain issue, that decision was followed by
the other courts and became the law unless modified by statue or by
gradual evolution.
Comprehensive General
Liability Policy
A policy particularly suited to a manufacturer, contractor or large
wholesaler or retailer providing broad coverage for claims made against
him for bodily injury or damage to property of others for which he may
become liable and which arise out of his entire business operation.
Comprehensive Personal
Liability
A form of liability insurance for individuals which insures the
policyholder in the event he has become liable to pay money for damage or
injury he has caused to others. This form does not include automobile
liability, but does cover almost every activity of the policyholder except
those which arise from the operations of a business. Hence "Personal"
Liability.
Conditions
The general terms or requirements upon which the insurance is based. For
the mutual understanding of the parties the conditions will commonly state
such matters as how the policy can be cancelled or renewed, provisions
with respect to change of the insured's interest, provisions as to what an
insured should do in the event of a loss, and conditions as to what he
should do subsequent to a loss etc.
A condition precedent is one that must be fulfilled prior to the general
fact at stake. The insured, for example, is required to give notice of a
claim and fulfill certain other obligations as a condition precedent to
his receiving a settlement.
A condition subsequent is one which is applicable subsequent to the event,
as for example, the insured is required to co-operate in the disposition
of the claim and to co-operate, other than in a monetary way, to assist to
recover from anyone who is responsible for the loss.
Conditions of the
Contract
Articles in contract defining or describing terms, responsibilities of
owner and contractor, performance and payment schedules, and the like.
Condominium
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.
Consequential Loss
The word "consequential" means something following as an effect or result.
It is an indirect result of the occurrence that causes the loss.
The difference between a direct loss and a consequential loss can be seen
in the destruction of a power station by wind. The damage to the power
station is a direct loss by wind. There is actual physical damage directly
resulting. The destruction of the power station also interrupts the
generation of power by the station. For example, a cold storage plant is
without electrical power. Foodstuffs spoil as a result or as a
consequence. This is a consequential loss, not a direct loss.
Consideration
The inducement to a contract; the cause, motive or price which induces a
contracting party to enter into an agreement, act or forbearance or
promise thereof. It is an essential part of a binding contract.
Consideration is either expressed or implied.
The money, or whatever is being used in substitution of money, paid for
the article or contract is "the consideration."
Constructive Total
Loss
A partial loss but where the damage is so extensive that repairs would
cost as much or more than the repaired property would be worth, or the
limit of insurance.
Contract
An agreement made between two or more persons, which is intended to be
enforceable at law, and is constituted by the acceptance by one party of
an offer made to him by the other party, to do or to abstain from doing
some act. The offer and acceptance may either be expressed or inferred by
indication in the conduct of the parties.
Contract Documents
Agreement, addenda, supporting documents, general conditions,
supplementary conditions, specifications and drawings and modifications to
an agreement.
Contractor's Liability
Insurance
Insurance protecting contractor from defined liability claims arising from
contractor's operations.
Contractual Liability
Liability assumed by a contract either written or implied. Legal liability
policies are based upon liability in tort or negligence and have very
little coverage normally for contractual liability (with a possible
exception of such matters as sidetrack agreements, etc.) However,
contractual liability may be covered in many instances as an additional
risk with an additional premium.
Contributory
Negligence
Many accidents are the fault of both parties who are involved in the
occurrence. The plaintiff who sues another party for damages also may be
guilty of some negligence, which is a concurrent cause of the damage. Such
a party is guilty of contributory negligence.
Cover
To protect with insurance, or the insurance protection provided.
Coverage
The nature of protection afforded by a particular policy. Can be used at
times interchangeably with "insurance" or "protection" as "fire coverage"
or "fire protection" or "fire insurance."
Credit Report
A report provided by a commercial credit reporting company which provides
details on the reputation and financial strength of an individual or
corporation.
Custody
Immediate control that an authority exercises over property or people.
Daily Report
Copy of the policy or bond for company or agency records. This term may
also include all correspondence, notes, inspection reports, credit
reports, etc. pertaining to the policy.
Data Processing
(Equipment Insurance)
A special insurance usually on an all risks basis. Covers physical loss
and loss from business interruption if the damage necessitates shutdown of
operations.
Debris Removal
A provision in an insurance policy most commonly found in fire insurance
providing indemnification for the cost of removal of the debris after a
fire.
Declaration
Statement, signed by the insured, warranting that information given by him
is true.
Decline
To refuse acceptance of an insurance application.
Deductible
An agreed specified sum to be deducted from the amount of loss and assumed
by the insured. See also Franchise.
Deductible Clause
A clause defining the amount of loss for which insured is liable; defines
insurer's and insured's contributions to cover losses.
Depreciation
Reduction in value of property through use, aging, deterioration and
obsolescence.
Direct Billing
A system for the collection of premiums whereby the insurance company
"directly bills" the insured for the premium in lieu of the conventional
collection of premiums by the agent or broker. The insurer sends a
statement to the agent, usually monthly, recording the premiums collected
directly, and credits the agent with the commission on those items.
Directors and Officers
Liability Insurance
Protection for officers and directors of a corporation against damages
resulting from negligent or wrongful acts in the course of their duties.
Also covers the corporation 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.
Disability
Inability to carry on in one's normal occupation due to accident or
sickness.
Disclosure
Act of making known something known.
Driver Training Credit
To encourage driver education courses at schools and colleges, many
insurers grant premium rebates to applicants for private passenger
automobile insurance who have successfully completed an approved training
program.
Dwelling
The living quarters occupied, or intended for occupancy, by a household.
Earned Premium
1) That portion of premium earned or charged for the period of time a
policy remained effective. For example, an annual policy paid for in
advance would be one twelfth "earned" at the end of the first full month
of its term.
2) An amount calculated by taking earned premium reserve at beginning of
period plus premium written during period, less unearned premium reserve
at end of period.
3) Premium actually exposed to loss.
Earthquake Insurance
Insurance against damage by earthquake.
Effective Date
The date of inception of an insurance policy, or the date additional
coverages become effective.
Employer's Liability
Insurance
Coverage for legal liability imposed on an employer to pay damages to an
employee injured by the employer's negligence. This is not Worker's
Compensation Insurance where special acts of legislature set out
specifically the relationship between the employer and employees in
certain circumstances and formula by which awards in each case are
computed.
Encumbrance
Mortgage, lien or other
charge against a property.
Endorsement
An amendment added to a written document, particularly an agreement
between parties, altering its provisions.
Equipment
Material for use on one machine, one vehicle, one unit. For example, a car
comes "equipped" with five tires. Tires other than those on the car are
not "equipment" of the car. They are instead the dealer's "stock of
tires." Equipment also includes contractor's equipment, e.g., backhoe,
bulldozer.
Estate
1) In law, one of the various interests in land.
2) The net worth of an individual's worldly goods.
Estimate (Bid
Function)
Costs a contractor anticipates for a project.
Estimated Premium
A tentative premium set in the anticipation of being approximately correct
but which may be increased or decreased when the final premium calculation
is made.
Estoppel
A bar created when someone by his action or lack of it indicates that he
will not exercise a right he has. He stops himself from exercising his
right later, e.g., if A owns a pen and stands by and watches B sell the
pen to C, as if the pen belonged to B, then A cannot later reclaim the
pen, arguing that it was his.
Exclusion
Risks, perils or properties defined in the policy as not covered.
Experience
Comparison of premiums earned with claims incurred for: a) an individual
insured b) group of insureds c) class of coverage.
Expiry
End of the policy period.
Explosion
A rupture of a pressure vessel of some kind due to excessive internal
pressure (usually accompanied by a loud noise).
Exposure
The hazard threatening a risk because of external or internal physical
conditions.
Extended Coverage
Insurance
An endorsement that enlarges the coverage afforded by the primary policy.
Coverages such as windstorm, hail, smoke, riot are extended coverages on a
fire policy.
Extra Expense
Insurance
A form of insurance policy covering the extra expense of an insured in
carrying on a business following a loss by an insured peril.
Face Brick
Brick, chosen for its visual rather than its structural characteristics,
used on wall's exposed surface.
Face of Policy
The front of the policy on which normally the name of the insurance
company, the name of the insured, the amount of insurance and the type of
insurance appear among many other items.
Fair Market Value
Price at which a buyer and seller, under no compulsion to buy or sell,
will trade.
Fellow, Chartered
Insurance Professional (F.C.I.P.)
A professional designation awarded to a
Chartered Insurance
Professional
(C.I.P.) after the successful
completion of several additional -
university level - educational requirements as designated by the
Insurance Institute of Canada.
Fire Damage
Damage caused by fire.
Fire Department
Service Clause
A provision in a fire insurance policy agreeing to pay the cost of
bringing a fire department to the location of the property insured in the
event of a fire. It is valuable where the insured's property is not in a
built-up area with its own fire department or where the risk is
sufficiently large to require additional fire department services.
Fire Insurance
Coverage for losses from fire and lightning and also the resultant damage
caused by smoke and water. Usually supplemented by Extended Coverage
Insurance. See definition.
Fire Marshall
A public official involved in fire prevention and in investigation of
fires particularly where arson is suspected.
Fire Resistant
A fire resistant building or article is generally designed to resist
certain higher heat temperatures for a certain period of time. It has a
lesser degree of resistance to fire and ranks slightly more hazardous than
"fireproof."
Fixed Assets
Tangible long-term assets such as land, building, furniture, fixtures,
machinery, equipment etc. held for use rather than for sale.
Fixtures
Anything that is attached to real property is known as a "fixture."
Fixtures when permanently attached to real property become part of the
real property. Tenant's fixtures are fixtures of a removable nature and
are the responsibility of the tenant for insurance purposes. Whether a
fixture is a tenant's fixture and movable or a landlord's fixture and
immovable is frequently determined by the purpose of the fixture.
Flat Cancellation
The cancellation of a policy as of the effective date with all paid
premium refunded.
Fleet
Policy
In automobile insurance, this is a policy insuring a number of cars for
one owner. In marine insurance, a policy insuring a number of ships for
one owner.
Floater Policy
A policy covering the same risk at a number of perhaps unspecified
locations possibly over a wide area (even world-wide); usually includes
goods being frequently moved from one location to another, e.g., Fur
Floater, Jewelry Floater, Contractors' Equipment Floater, etc.
Forgery
1) The illegal signing of another's name to a document, such as, a cheque.
2) Falsely making or altering a written instrument.
Frame
Refers to the construction of a building built of lumber.
Fraud
1) Methods used to deceive to cause unwarranted favourable decision for
one's own benefit.
2) Deliberate misrepresentation or misstatement.
3) Concealment of facts which should at the time be made known.
Fraudulent
Dishonest; based on or obtained by fraud.
Fraudulent
Misrepresentation
A false statement made knowing it to be false and intending another to act
on it to his detriment, or made carelessly or recklessly without regard to
whether it is true or false.
In insurance it is most frequently found in the intentional
misrepresentation of a risk to obtain insurance or in proof of loss after
the loss occurs.
Free on Board (F.O.B.)
When goods are shipped F.O.B., the shipper is responsible only until the
goods have been placed on board the vessel or freight car or truck or
other means of transport. After that the risk belongs to the consignee.
Friendly Fire
A fire confined to the place it is supposed to be, e.g., in the fireplace;
in the incinerator. See Hostile Fire.
Glass Insurance
Insurance against the breakage of glass. The coverage is usually extended
to certain other incidental expenses associated therewith. See Plate
Glass.
Good Faith
Most ordinary contracts are good faith contracts. Insurance contracts are
agreements made in the utmost good faith. This implies a standard of
honesty greater than that usually required in most ordinary commercial
contracts.
Gross Negligence
The degree of negligence somewhat greater than ordinary negligence. It may
be a reckless wanton and willful misconduct causing bodily injury and/or
property damage.
Guiding Principles
A loss may be covered by more than one policy. One policy may have a
co-insurance clause and the other may not. How any loss in such
circumstances should be apportioned between the various insurance
companies involved creates a problem. To meet this problem, the majority
of insurance companies have agreed to certain rules and principles. These
principles override the actual wording of the policy so the insured is
indemnified with least difficulty.
Habitation
Dwelling place; residence.
Hazard
1) A risk or probability that the event insured against might occur.
2) Condition which engenders or increases the chances of a loss.
Hazard, Moral
Hazard arising from character, interest, habits and lack of integrity of
the insured or person concerned.
Hazard, Physical
Hazard arising from physical condition or characteristics of the object
that is insured, e.g., using and storing volatile materials and substances
on the premises.
Highway Traffic Act
The body or system of laws which govern the obligations of the provincial
governments and users of roads. A breach or conviction of any of these
laws may be an offence but does not of itself impose legal liability, but
it may be relied upon in any proceeding to establish or negate any
liability.
Hit and Run Accident
Collision between motor vehicle and/or a motor vehicle and another object
and/or a motor vehicle and a pedestrian where a driver leaves the scene of
the accident without identifying him/herself. This is an offence under the
Highway Traffic Act.
Holdup
The taking of money or property by threat or the use of force or violence.
Homeowners Policy
A multi-peril insurance policy for dwelling risks, combining coverages for
fire, and extended coverages including theft, and liability.
Hostile Fire
A fire which occurs in or escapes to a place not anticipated, e.g., a fire
in a fireplace becomes uncontrollable and ignites something externally.
See Friendly Fire.
Improvements and
Betterments
Additions or changes to a rented premises by a tenant
at his own expense. Also called Tenant's Improvements.
Incendiary
Malicious setting on fire or preparing, providing and
setting the means for fire to start.
Inception
The date and time on which coverage under an insurance
policy takes effect.
Indemnify
To provide compensation for loss or expenses incurred.
Indemnity
A contract, expressed or implied, to repay in the
event of a loss. Insured neither gains nor loses.
Indemnity Period
The policy period.
Independent Adjuster
One who adjusts losses on behalf of insurance
companies, but is not employed by any one insurance company.
Inflammable
Easily set on fire.
In
Force
Insurance policy which is in effect, and has not
expired or been cancelled.
Inherent Vice
The quality that something has to deteriorate or
damage itself without outside help, e.g., milk sours; coal combusts
spontaneously.
Insurable Interest
An interest which the insured must have in the subject
matter of the insurance he buys so that if the event insured against
occurs, the insured will suffer a pecuniary loss.
Insurance
A contract in which one party, the insurer, for
monetary consideration agrees to reimburse another, the insured, for loss
or liability for a loss on a defined subject caused by specified hazards
or perils.
Insurance Bureau of
Canada (IBC)
The trade association of the Property/Casualty
insurance industry in Canada. It concerns itself with such matters as
Public Relations, Collection of Statistics, Promulgation of forms etc. It
has a substantial permanent staff but also many committees made up of
volunteers from the senior ranks of insurance companies.
Insurance Crime
Prevention Bureau (I.C.P.B.)
An organization supported by property and casualty
insurers which investigates fraudulent insurance claims and provides a
deterrent to such losses. Loss prevention information is maintained by the
Bureau for use by member insurers, independent claims adjusters and
government authorities across the country.
Insurance Institute of
Canada (I.I.C.)
The educational body of the general insurance
industry. It consists of an association of provincial institutes. Among
other things, it conducts correspondence courses, holds annual
examinations and grants diplomas.
Insurance Policy
A written contract of insurance.
Insured
The entity (individual or otherwise) whose risk of
financial loss from an insured peril is protected by the insurance policy.
Insurer
The company providing the insurance coverage.
Insuring Clause
Describes the intent of the policy, just what
insurance coverage is provided by the policy and in what limits.
Intermediary
1) The agent/broker negotiating insurance or
reinsurance contracts for another.
2) Any party representing another party, in negotiation with a third
party.
Inventory
Itemized list of goods and property on hand.
Joint and Several
Liability Clause
This exists when the situation is such that a creditor in the case can sue
any one of the debtors individually, or any, several or all of them, at
the creditor's option. This situation applies to tort-feasors as well as
to commercial debtors. Persons who together commit a tort and injure
another person generally would be jointly and severally liable for the
damage. An injured person has the option of suing the entire group or of
suing the one having the greatest financial strength.
Judgment
1) An order given by a Court.
2) A debt resulting from a Court Order.
Jurisprudence
Common law, being based partly on decisions made in previous cases and
quotations from these earlier cases, supports the decision that should be
reached in any particular case presently before the Court. These
previously decided cases are known as jurisprudence.
Jury
A body of persons selected from the general populace sworn to hear
evidence in a law case and to make a decision according to their findings.
Lapse
An insurance policy which, having reached its expiry date,
is not renewed or extended is said to have lapsed.
Latent Defect
A defect which is not apparent. A hidden defect.
Lease
A contract by which one party, called the lessor, conveys
to another, called the lessee, real estate, equipment or facilities for a
specified term and for a specified rent.
Legal Liability
Liability imposed by law on individuals or corporations to
pay for harm done to others. Such law may be the common law, statute law
or customs which over a period of time have taken on the same status as
law. Legal liability may also be assumed under the terms of a contract.
Lessee
One that holds real or personal property under a lease,
e.g., a tenant of rented premises.
Lessor
One that conveys property by lease, e.g., a landlord of
rented premises.
Liability Insurance
Insurance which agrees to indemnify the insured for sums
he may be required by law to pay to third parties as damages for bodily
injury or damage to property.
Liability Limits
The maximum amount of insurance provided under a policy of liability
insurance. There may be different limits for bodily injury and property
damage, or, more commonly, a single amount for all claims for bodily
injury or property damage arising from one accident or occurrence.
Policies providing cover for claims arising from products manufactured by
the insured or arising from his completed operations generally contain a
further "aggregate limit" applicable to these, imposing a maximum for all
claims occurring during the course of a single year.
Claims handling and adjusting expenses, costs of legal defense and
prejudgment interest are normally payable in addition to the liability
limits stated in the policy.
Libel Insurance
Insurance against claims arising from alleged libel, slander, defamation
of character, etc. Principally written for the protection of those engaged
in the publishing or advertising fields, as well as TV or radio
broadcasters. Also provided as an extension to a liability policy as part
of "personal injury" cover, which also includes false arrest, malicious
prosecution and wrongful eviction.
Lien
A charge upon real or personal property as security for some debt or duty.
Also, the security interest created by a mortgage. The conditions of an
insurance policy require the disclosure to the insurer of any existing
lien on the insured property.
Like Kind and Quality
(LKQ)
Refers to replacement of damaged, destroyed or lost property with used
property of similar type and condition.
Limit of Liability
The maximum amount, as stated in the policy, which an insurer is bound to
pay in case of a loss. See also Liability Limits.
Livestock Insurance
Insurance against loss (death) of horses, cattle, hogs, sheep, dogs, etc.
owned by the insured. The cover can be on an all risk or a specified
perils basis and includes loss by theft. The insurance is usually written
by specialist livestock insurers.
Loss
A word often used in place of the word "claim." It refers to the amount an
insurer must pay because one of the possibilities of loss insured against
under a policy, has happened.
Loss of Use Insurance
Cover against expenses incurred as a result of damage to the property
insured resulting in the need to replace the property on a temporary
basis. In automobile insurance this might refer to the cost of a rental
car while the insured vehicle is under repair as the result of an
accident. In a homeowner's policy it might refer to additional living
expense when the insured premises are rendered uninhabitable by an insured
peril.
Loss Payable Clause
A policy clause providing, at the direction of the insured, that in the
event of a loss, payment shall be made to an interested party other than
the insured, e.g., a mortgagee.
Malicious Mischief
Injury to the rights or property of another with a wicked or perverse
intent.
Malpractice
A performance by a professional which is deficient in skill from what
might ordinarily be expected of a professional person. The standard of
performance to which a professional person will be held is necessarily
higher than the standard which an unskilled person would be expected to
display.
Manufacturer's and
Contractor's Liability Policy
A policy which provides coverage against the liability arising from the
ownership of property or the carrying out of operations. This type of
policy does not provide any coverage with respect to the hazards of
products or completed operations.
Market Value
The value of an asset based on a current market valuation, e.g., the
amount for which the item could be sold on the open market.
Masonry Construction
A form of construction identified by self-supporting walls of masonry,
e.g., brick, stone or hollow concrete block, but with floors and roofs
which may be constructed of combustible materials, usually wood.
Material Fact
Something affecting a contract of insurance important enough to change the
agreement between the company and the policyholder. Material facts must be
disclosed if asked about. Failure to do so may result in a voiding of the
policy involved. An exception to this general rule is that, with respect
to ocean marine insurance, all material facts must be disclosed whether
the insurer asks the appropriate question or not.
Medical Payments
Insurance
A provision in an insurance policy to pay certain specified medical
expenses of others irrespective of the insured's legal liability.
Mercantile Risk
Hazard or peril of a merchant in selling his stock of
goods.
Merchandise
Those
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