CISR flashcards

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

Certificate of Insurance

A document that evidences coverage currently in force but does not amend, extend, or create coverage; it is not a policy and gives the holder no contractual rights.

Fiduciary Premium Handling

Premiums an agency collects are held in trust for the insurer; commingling them with agency operating funds is prohibited and may expose agency principals to personal liability.

Binding Authority

The power to obligate an insurer to a risk. It exists only as granted in the agency-carrier agreement or through express, implied, or apparent authority.

E&O File Documentation

Contemporaneous written records of client conversations and coverage decisions form the agency's primary defense in an errors and omissions claim, showing what was said and agreed.

General Aggregate Limit

The most the CGL pays for all Coverage A and Coverage B losses in one policy period, excluding products-completed operations, which carries its own separate aggregate.

Insured Contract

A defined contract such as a lease of premises, easement, or specified business agreement whose liability assumptions are carved out of the CGL contractual liability exclusion.

Care, Custody, or Control

A CGL exclusion barring property damage to personal property in the insured's care, custody, or control; bailee, garage keepers, or other coverage must fill that gap.

Umbrella versus Excess

An umbrella drops down to cover gaps and self-insured retentions and may broaden coverage; a pure excess policy only sits above scheduled underlying limits and follows their terms.

Symbol 1 Any Auto

A business auto coverage symbol providing liability coverage for any auto, including owned, hired, borrowed, and non-owned autos used in the insured's business.

Employers Liability Part Two

Workers compensation coverage responding to employee injury suits not payable under statutory benefits, with limits stated per accident, per employee, and as a policy aggregate.

Experience Modification Factor

A rating factor comparing an employer's actual losses with expected losses for its classification; below 1.00 produces a credit and above 1.00 a debit on manual premium.

Garage Keepers Coverage

Coverage for damage to customers' autos left in the insured's care, custody, and control for service or storage, written on either a legal liability or direct primary basis.

Law of Large Numbers

As the number of similar, independent exposure units increases, actual loss experience tends to converge on expected loss, making predictions and rates more reliable.

Moral Hazard

A hazard arising from dishonesty or intentional conduct, such as arson or a fabricated claim, that increases the likelihood that a loss will occur.

Risk Retention

A risk management technique in which the organization knowingly absorbs losses itself, often through deductibles or a funded self-insurance program, rather than transferring them.

Insurable Risk Characteristics

Losses must be fortuitous, definite and measurable, drawn from many similar exposure units, not catastrophic, and have a calculable probability supporting an affordable premium.

Coinsurance Formula

Recovery equals the loss multiplied by the limit carried and divided by the limit required (value times the coinsurance percentage), never exceeding the policy limit.

Agreed Value Option

A commercial property option that suspends the coinsurance clause when the insured submits an accurate signed statement of values, making the agreed amount the limit.

Vacancy Provision

If a building remains vacant beyond the stated period, commonly 45 days, losses from specified causes such as vandalism, water damage, and glass are excluded or sharply restricted.

Newly Acquired Auto

An auto acquired during the policy period is covered for the broadest coverage on any owned auto, typically 14 days with no other coverage or 4 days if other coverage exists.

Underinsured Motorists Coverage

Pays the difference between the insured's legally entitled damages and the amount an at-fault driver's liability insurance actually paid, up to the UIM limit.

Temporary Substitute Auto

A non-owned vehicle used while the insured's covered auto is out of service because of breakdown, repair, servicing, loss, or destruction, and covered as a covered auto.

Named Driver Exclusion

An endorsement removing a specifically named person from coverage; the named insured agrees no coverage applies while that person operates the described vehicle.

Coverage B Other Structures

Homeowners coverage for structures on the residence premises not attached to the dwelling, such as detached garages, fences, and sheds, typically limited to 10% of Coverage A.

Loss of Use Coverage

Homeowners Coverage D pays additional living expenses and fair rental value when the residence is uninhabitable because of a covered peril, for the stated time period.

HO-3 Special Form

The most common homeowners form; it covers the dwelling and other structures on an open-peril basis while personal property is covered on a named-peril basis.

Incontestability Clause

After the policy has been in force for a stated period, typically two years, the insurer cannot void life coverage for misstatements on the application, absent fraud or nonpayment.

Universal Life Option B

An increasing death benefit option in which the benefit equals the specified amount plus accumulated cash value, producing higher mortality charges as the cash value grows.

Coordination of Benefits

Rules that determine which health plan pays first when a person has two coverages, preventing duplicate payment; the primary plan pays its allowable amount before the secondary.

Umbrella Self-Insured Retention

The insured's own payment obligation for a loss not covered by the required underlying policies; the umbrella responds only after the retention is satisfied.

NFIP Waiting Period

Flood policies generally take effect 30 days after application and premium payment, except when the purchase is tied to a new mortgage closing or loan.

Personal Articles Floater

An inland marine form covering scheduled valuables such as jewelry, furs, and fine art on an open-peril, worldwide basis at agreed value, usually with no deductible.