AIC-M key terms

The event or condition that must happen during a policy period for coverage to apply, such as an occurrence, an accident, or a claims-made reporting requirement.

The core policy section stating what the insurer promises to pay or do, identifying covered perils, persons, and property, and setting the broad scope of protection.

A policy provision that removes specific losses, perils, persons, or property from coverage, narrowing the insuring agreement and often shifting that risk back to the insured.

An insurer's obligation to provide and pay for legal counsel when a claim potentially falls within coverage, a duty broader than the duty to indemnify in most jurisdictions.

A written notice telling the insured that the insurer will defend or handle a claim while coverage questions remain open, preserving the insurer's right to later deny coverage.

A valuation method that pays replacement cost minus depreciation, reflecting the damaged property's value at the time of loss rather than what new property would cost.

A settlement basis that pays what it costs to repair or replace damaged property with new property of similar kind and quality, without deducting for depreciation.

The insurer's right, after paying a claim, to pursue the party responsible for the loss to recover those payments, standing in the insured's legal shoes.

A formal, often sworn statement from the insured giving details of a claim, including date, cause, and amount of loss, typically required within a policy-specified period.

The insured's obligation to tell the insurer about a claim or occurrence within a reasonable or policy-defined time, so the insurer can investigate while evidence is fresh.

A loss caused by two or more forces acting together, at least one covered and one excluded, requiring analysis of how the policy and jurisdiction treat mixed causes.

A dollar amount the insured pays on each claim before the policy responds, functioning like a deductible but often carrying conditions such as the insured handling the defense.

Costs incurred to investigate, evaluate, defend, and settle claims, such as adjuster time, experts, and legal fees, tracked separately from indemnity payments.

A failure to exercise the care a reasonable person would use in similar circumstances, requiring duty, breach, causation, and damages to establish legal liability.

The event or action that, in a natural and continuous sequence, produces an injury without an intervening cause, linking conduct to harm in liability claims.

A doctrine that reduces an injured party's recovery in proportion to that party's own share of fault, with some states barring recovery above a set threshold.

A rule allowing negligence to be inferred when an injury-causing event ordinarily would not occur without negligence and the defendant controlled the instrumentality involved.

Liability imposed without proof of negligence, as for defective products or abnormally dangerous activities, based on the nature of the product or activity rather than fault.

Legal responsibility of one party for the acts of another, most often an employer's liability for employees acting within the scope of their employment.

A law setting the deadline by which a claim or lawsuit must be filed, after which the right to sue is generally lost.

An insurer's unreasonable or dishonest handling of a claim that breaches the implied covenant of good faith, exposing it to damages beyond policy limits.

Damages awarded to punish and deter especially harmful conduct rather than to compensate the injured party, often available only on a showing of gross or intentional wrongdoing.

A rule allowing a claimant to recover the full judgment from any one liable defendant regardless of that defendant's share of fault, with contribution among defendants possibly following.

The process of quickly sorting incoming claims by severity, complexity, and urgency so each is routed to the right handler and resources.

The maximum dollar amount an adjuster may commit to resolve a claim without seeking approval from a supervisor or committee.

An estimate of the amount expected to be paid on a known open claim, set by the adjuster and updated as new information develops.

A reserve estimate for claims that have occurred but have not yet been reported to the insurer, calculated using actuarial methods and historical reporting patterns.

The coordinated process of selecting, directing, and controlling outside counsel and litigation strategy to contain costs and achieve favorable claim outcomes.

The elapsed time from claim report to final resolution, used as an operational measure of efficiency and customer service.

A dedicated team that investigates suspected fraudulent or suspicious claims, working with adjusters, data tools, and law enforcement.

A prearranged strategy covering staffing, communications, vendor activation, and authority levels so the organization can handle a surge of catastrophe claims.

The obligation to act in the best interests of others, such as insureds or the company, ahead of personal gain, handling entrusted funds and information with care.

A situation where a person's personal, financial, or professional interests could improperly influence claim decisions, requiring disclosure and often removal from the matter.

Statutorily prohibited conduct such as unreasonable delay, lowball offers, or failure to explain claim decisions, which can trigger regulatory penalties and bad faith exposure.

A structured approach for resolving moral dilemmas by identifying stakeholders, applicable rules, likely consequences, and core values before choosing a course of action.

A quantifiable measure tied to a strategic objective, used to track claim outcomes such as accuracy, timeliness, cost, and customer satisfaction.

An ongoing, dialogue-based process in which a leader helps an employee build skills through observation, feedback, questioning, and repeated practice.

The structured methods used to prepare people and processes for organizational change, addressing communication, training, resistance, and reinforcement of new behaviors.