C13: Insurance Against Liability-Part 1 key terms

A policy that pays on behalf of an insured the sums the insured becomes legally obligated to pay as damages because of injury or damage to others, and that also funds the insured's legal defense.

A demand for compensation made by someone outside the insurance contract who alleges the insured caused harm, as opposed to a first-party claim by the insured for its own loss.

A civil wrong other than breach of contract that causes harm for which the injured party may sue, whether the wrong arises from carelessness, intentional conduct, or strict responsibility.

Failure to exercise the degree of care a reasonable person would use in like circumstances, which causes unintended harm and creates legal liability when duty, breach, causation, and damage are all present.

The legal obligation to protect others from unreasonable risk of harm, measured by what a reasonably prudent person would do in the same situation and relationship.

A defendant's departure from the standard of reasonable care owed to a claimant, established by showing the conduct fell below what a prudent person would have done.

The link between a defendant's conduct and an injury that makes the harm a reasonably foreseeable consequence of the conduct, so liability may attach.

A doctrine that reduces an injured party's recovery in proportion to that party's own share of fault, and in some jurisdictions bars recovery when fault exceeds a set threshold.

A defense under which an injured party whose own carelessness contributed to the harm is barred from recovering anything, a harsh rule now replaced in most states.

A defense asserting that the injured party knowingly and voluntarily accepted a known danger, thereby giving up the right to recover for harm arising from that danger.

Responsibility imposed without proof of carelessness, typically for abnormally dangerous activities or defective products, where the claimant need show only harm and causation.

Legal responsibility of one party for the acts of another, such as an employer's liability for an employee's negligent acts committed within the scope of employment.

In the standard general liability form, physical harm to a person, including sickness, disease, and death, but not emotional distress standing alone without physical manifestation.

Physical injury to tangible property, including resulting loss of use, or loss of use of tangible property that has not been physically injured, such as loss of access to a building.

An accident, including continuous or repeated exposure to substantially the same general harmful conditions, that results in bodily injury or property damage during the policy period.

Coverage B harm such as false arrest, wrongful eviction, libel, slander, invasion of privacy, and infringement of advertising ideas, arising from the insured's business conduct.

Injury arising from oral or written publication of material that libels or slanders a person or business, invades privacy, or infringes copyright, trade dress, or slogan in an advertisement.

Coverage C pays reasonable medical expenses incurred within a stated period by persons injured on the insured's premises or by the insured's operations, regardless of fault.

Amounts the insurer pays in addition to the liability limit, such as defense costs, bonds, and interest on judgments, so they do not erode the limit of liability.

The 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 and generally not limited by policy limits.

The maximum amount the insurer will pay for covered claims, stated per occurrence and in the aggregate, and sometimes subject to sublimits for specific coverages.

The most the insurer will pay for all damages arising out of any one occurrence or offense, regardless of how many claimants are involved.

The total amount the insurer will pay for all covered claims during a policy period, which caps the sum of payments even when each occurrence is below the per-occurrence limit.

A stated amount the insured must pay toward each claim before the policy responds, often used with claims-made and excess coverage, and distinct from a deductible.

The portion of a covered loss the insured absorbs before the insurer pays, typically subtracted from each claim payment or applied to the occurrence.

A liability policy that covers claims first made against the insured during the policy period, provided the wrongful act occurred on or after the retroactive date.

The date in a claims-made policy before which no wrongful acts are covered; acts occurring on or after that date are covered if the claim is first made during the policy period.

An optional or automatic extension after a claims-made policy ends that allows claims for wrongful acts occurring before expiry to be reported and covered for a stated additional premium.

The event or condition that activates a policy's coverage, such as the date of injury in an occurrence policy or the date a claim is made in a claims-made policy.

A liability policy that sits above primary and other underlying coverage, paying excess limits over those policies and sometimes dropping down to cover gaps in the underlying program.

A policy that pays only after a specified underlying limit has been exhausted and that usually follows the terms of the underlying policy rather than broadening coverage.

Coverage for claims arising from the rendering or failure to render professional services, including errors and omissions, and typically written on a claims-made basis.

A form of professional liability coverage protecting against claims that the insured's negligent acts, mistakes, or failure to perform professional services caused financial or other harm.

A person or organization added to the policy by endorsement who receives coverage as an insured, commonly required by contract such as a lease or construction agreement.

A property damage exclusion barring coverage for damage to property in the insured's care, custody, or control, or on premises the insured occupies, because such property is better insured under property forms.

An exclusion barring coverage for damage to the insured's own completed work or the cost of repairing or replacing it, though resulting damage to other property may still be covered.

The exposure for bodily injury or property damage occurring away from the insured's premises and arising from products the insured sold or work it completed.