CISR key terms

A legal obligation to act in another party's best interest when handling money or property. Insurance agents owe this duty to clients and insurers regarding premiums and coverage advice.

Professional liability coverage for insurance agents and agencies against claims that their negligent acts, errors, or omissions caused a client financial harm. It typically pays defense costs and settlements.

An agent's contractual power to commit an insurer to cover a risk before a policy is issued. The authority is limited by the insurer's rules and may be suspended or withdrawn.

A segregated bank account an agency uses to hold client premiums and insurer funds in a fiduciary capacity. Mixing these funds with agency operating money is generally prohibited.

A commercial liability policy covering claims of bodily injury, property damage, personal injury, and advertising injury arising from the insured's premises, operations, products, or completed work.

An accident, including continuous or repeated exposure to substantially the same harmful conditions, that causes bodily injury or property damage during the policy period under occurrence-based liability coverage.

The most an insurer will pay for all covered claims combined during a policy period, separate from per-occurrence limits. It caps the insurer's total liability for the term.

A person or organization added by endorsement to another's liability policy, receiving coverage for claims connected to the named insured's operations, premises, or work. The endorsement defines the scope.

A statutory benefit system paying medical care, wage replacement, and rehabilitation to employees injured on the job, regardless of fault. In exchange, employers receive limited immunity from employee lawsuits.

Coverage protecting an employer against employee injury or disease claims that fall outside workers compensation exclusive remedy, such as third-party actions or serious misconduct claims. It often accompanies a workers compensation policy.

A commercial policy insuring liability and physical damage for vehicles used in a business. Covered-auto symbols determine which owned, hired, or non-owned vehicles qualify.

A vehicle the insured business leases, rents, hires, or borrows for business use. Liability for hired autos is commonly provided by business auto or umbrella policies.

A vehicle used in the insured business but not owned, leased, hired, rented, or borrowed by the business, such as an employee's personal car used for company errands.

The possibility of loss or uncertainty about outcomes. In insurance, it usually means the chance of financial loss from an uncertain event.

A risk involving only the possibility of loss or no loss, with no chance of gain. Insurers generally prefer pure risks because they are more predictable than speculative risks.

A risk management technique in which a person or organization accepts and funds potential losses itself. Deductibles, self-insurance, and reserves are common examples.

A risk management technique that shifts the financial consequences of a loss to another party, often through insurance or a contractual indemnity agreement.

A property insurance provision requiring coverage equal to a stated percentage of the property's value. If the insured carries less, a penalty reduces the claim payment.

Commercial property coverage replacing lost net income and continuing normal operating expenses while a business is shut down by a covered loss. It usually includes a period of restoration.

The cost to repair or replace damaged property with new property of similar kind and quality, without deducting for depreciation. Policy limits and conditions still apply.

The value of damaged property calculated as replacement cost minus depreciation. It reflects the property's pre-loss value rather than the cost of buying new.

A standardized personal insurance contract covering liability and physical damage for private passenger autos. It includes parts for liability, medical payments, uninsured motorists, and physical damage.

Personal auto physical damage coverage for loss to the insured vehicle caused by impact with another vehicle or object, or by overturn, regardless of fault. A deductible usually applies.

Personal auto physical damage coverage for losses to the insured vehicle from causes other than collision, such as theft, fire, vandalism, glass breakage, or weather. A deductible usually applies.

Personal auto coverage paying the insured for bodily injury caused by a negligent driver who has no liability insurance or cannot be identified in a hit-and-run. State rules vary.

A common homeowners form covering the dwelling and other structures on an open-peril basis and personal property on a named-peril basis, plus personal liability and medical payments.

The homeowners policy section insuring the dwelling on the residence premises, including attached structures. The limit is usually based on replacement cost.

The homeowners policy section covering personal property owned or used by the insured, subject to special limits for categories such as jewelry, money, and silverware. It is usually named-peril coverage.

Coverage paying extra costs to repair or rebuild according to current building codes or ordinances after a covered loss. Standard homeowners policies provide limited or no such coverage.

Life insurance providing a death benefit for a specified period, such as 10 or 20 years. It usually has no cash value and offers pure protection at a relatively low premium.

Permanent life insurance with level premiums, a guaranteed death benefit, and cash value that grows over time. It remains in force as long as premiums are paid.

Permanent life insurance with flexible premiums and an adjustable death benefit. The policy accumulates cash value and credits interest, with costs deducted from the account.

Coverage that pays for medical expenses such as doctor visits, hospital care, prescriptions, and preventive services. It may be indemnity, managed care, or consumer-directed in structure.

Health-related coverage replacing a portion of earned income when the insured is unable to work because of illness or injury. Benefits are paid according to policy definitions and waiting periods.

The person or entity named to receive life insurance proceeds or other policy benefits when the insured dies. Primary and contingent beneficiary designations control who is paid.

A policy providing excess liability limits over homeowners and auto policies, and sometimes filling coverage gaps. It usually requires maintaining underlying insurance at specified limits.

Coverage for direct physical loss from flooding, including overflow of inland or tidal waters and mudflow. Standard homeowners policies exclude flood, so separate coverage is usually needed.

Insurance for boats and personal watercraft, covering liability and physical damage. It may be added to a homeowners policy for small craft or written as a separate policy.

A property policy for rented or owner-occupied dwellings that does not qualify for homeowners coverage. It insures the building and personal property and can add liability by endorsement.