Casualty-Only flashcards

35 cards. Read the term and the definition here. The deck at the top of this page is optional.

Insurable Interest

A financial stake in the subject matter such that loss causes a direct economic detriment; required at policy inception for life insurance and at time of loss for property/casualty.

Principle of Indemnity

The insured is restored to approximately the pre-loss financial position, never profiting from a loss; recovery is capped at the actual loss or policy limit.

Utmost Good Faith

The mutual duty of the applicant and insurer to disclose material facts; material misrepresentation by the applicant can void coverage from inception.

Moral Hazard

A change in behavior caused by the presence of insurance, such as increased carelessness or intentional acts designed to collect benefits.

Occurrence Trigger

A policy trigger that responds to bodily injury or property damage that occurs during the policy period, regardless of when the claim is reported.

Claims-Made Trigger

A policy trigger that responds to claims first made and reported during the policy period, subject to a retroactive date that limits prior acts.

Extended Reporting Period

A provision extending the time to report claims after a claims-made policy ends; it does not extend the retroactive date.

Other Insurance Clause

A provision that allocates a loss among concurrent policies using pro rata, excess, or escape wording when more than one policy covers the same loss.

Duties After Loss

Conditions the insured must satisfy after a loss, including prompt notice, cooperation, proof of loss, and mitigation of further damage.

Commercial General Liability

A liability form covering bodily injury, property damage, personal and advertising injury, and medical payments on an occurrence or claims-made basis.

Products-Completed Operations

A CGL hazard covering liability for bodily injury or property damage arising from products or completed work away from the insured's premises, with its own aggregate.

Contractual Liability Exclusion

A CGL exclusion barring liability assumed by contract, with an exception for insured contracts such as leases, easements, and certain indemnity agreements.

Personal and Advertising Injury

CGL Coverage B offenses such as libel, slander, wrongful eviction, and infringement of copyright or slogan in an advertisement.

Additional Insured Endorsement

An endorsement extending liability coverage to another party, such as a landlord or general contractor, subject to the endorsement's wording and limits.

Business Auto Symbols

Numbers 1 through 9 in the business auto form that designate which autos are covered; symbol 1 means any auto, symbol 7 means specifically described autos.

Uninsured Motorist Coverage

Coverage paying the insured's damages when an at-fault driver has no liability insurance, subject to the policy's UM limits and state requirements.

Garagekeepers Coverage

Coverage protecting a business that holds customers' vehicles for service, storage, or repair against liability for damage to those vehicles.

Hired and Non-Owned Auto

Liability coverage for rented vehicles and employee-owned autos used in business, commonly added to commercial auto or general liability programs.

Exclusive Remedy Doctrine

The principle that workers' compensation benefits are the employee's exclusive remedy against the employer for work-related injury, barring most tort suits.

Experience Modification

A factor applied to workers' compensation premium based on the employer's loss history relative to expected losses for its classification.

Employers' Liability Coverage

Part Two of a workers' compensation policy covering tort suits by employees that fall outside the statutory benefits, subject to stated policy limits.

Workers' Compensation Premium

Calculated as payroll per $100 multiplied by the class rate and experience modification, subject to minimum premium and audit provisions.

Coinsurance Clause

A property provision requiring the insured to carry a limit at least equal to a stated percentage of value or face a reduced recovery on partial losses.

Business Income Coverage

Coverage for lost net income and continuing operating expenses during the period of restoration following a covered property loss.

Period of Restoration

The time beginning at the loss and ending when the damaged property is repaired or replaced with reasonable speed or the business relocates.

Extra Expense Coverage

Coverage for costs incurred to continue operations and reduce downtime after a loss, separate from business income coverage.

Employee Theft Coverage

A crime coverage form paying for loss of money, securities, or property caused by employee dishonesty, subject to the stated limit and conditions.

Inland Marine Insurance

Coverage for property in transit, mobile property, and property of others, following the property wherever it goes rather than at a fixed location.

Surety Bond

A three-party instrument involving obligee, principal, and surety that guarantees performance of an obligation rather than insuring against loss.

Special Investigation Unit

A dedicated fraud investigation function to which suspected fraudulent claims are referred, with documentation of the basis for referral.

Bad Faith Exposure

Liability arising from unreasonable delay, failure to investigate, or failure to settle within limits, exposing the insurer to extra-contractual damages.

Rebating

Returning part of the commission or premium to a buyer as an inducement to purchase; an unfair trade practice prohibited in most states.

McCarran-Ferguson Act

A 1945 federal law leaving insurance regulation primarily to the states, with a limited federal antitrust exemption for state-regulated insurance.

Combined Ratio

The sum of the loss ratio and expense ratio; a result below 100 percent indicates underwriting profit before investment income.

Schedule Rating

A discretionary underwriting adjustment applying credits or debits to premium based on individual risk characteristics not captured by class rating.