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Description of an option in which the underlying stock’s price is equal to the exercise or strike price when the option expires.
Favorable income tax treatment under which all tax-free cost basis is deemed distributed before any taxable gain is distributed.
The four factors involved in marketing any product or service: product, promotion, place (or position), and price.
Description of option in which the underlying stock’s price is greater than the exercise or strike price when the option expires.
Description of an option in which the underlying stock’s price is less than the exercise or strike price when the option expires.
A pension funding basis in which fund contributions are collected from current employees and are the source of payments to the current retirees.
A situation in which all liability claim holders of a financial institution seek to withdraw their funds simultaneously because they fear that the financial institution will be unable to meet their demands for cash in the near future.
Character, capacity, and capital.
Defined by the Commercial General Liability (CGL) policy as the work or operations performed by or on behalf of the named insured; material and equipment used in connection with the work; and warranties and representations regarding the work.

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A rate that is used by an insurer that is not statistically credible because adequate data do not exist for that particular coverage or class. Such rates are based on the experience and best judgment for each individual loss exposure.
The rate classifications provided by the ISO Commercial Lines Manual that describe operations with unique characteristics or for which inadequate statistical experience exists.

A type of aircraft hull insurance that provides “all-risks” coverage whether or not the aircraft is in flight at the time of loss.
A type of aircraft hull insurance that provides the same coverage as “all risks”—not in motion plus coverage while the aircraft is taxiing.
A type of aircraft hull insurance that provides “all-risks” coverage only while the aircraft is on the ground and not moving under its own power or from any resulting momentum.
A rule used to determine whether a defendant’s act was the proximate cause of a plaintiff’s harm based on the determination that the plaintiff’s harm could not have occurred but for the defendant’s act.
The most the insurer will pay for either damage by a cause other than fire to any one premises rented to the named insured or damage by fire to any one premises rented to the named insured or temporarily occupied by the named insured with the owner's permission.
Unfavorable income tax treatment under which all taxable gain is deemed distributed before any tax-free cost basis is deemed distributed.
In surety bond underwriting, the principal’s character, capacity, and capital.
Defined by the Commercial General Liability (CGL) policy as any goods or products, other than real property, that are manufactured, sold, handled, distributed, or disposed of by the named insured or others trading under the named insured’s name.

1

The surety practice that requires a contractor to have working capital equal to at least 10 percent of backlog. Alternatively referred to as "ten times net quick.”
A surety practice that requires a contractor to explain why the difference between the first and second bids is 10 percent or greater.
An annual sales fee, levied by some mutual funds, taken against fund assets to reimburse the fund for distribution costs.

4

See Section 401(k) plan.
A comparative negligence rule that permits a plaintiff to recover reduced damages so long as the plaintiff’s negligence is less than the other party’s negligence.

5

A comparative negligence rule that permits a plaintiff to recover reduced damages so long as the plaintiff’s negligence is not greater than 50 percent of the total negligence leading to harm.
A state-sponsored, professionally administered savings plan for postsecondary education expenses that accumulates funds that are federal tax deferred and may be exempt from certain state taxes.

A

A condition that prohibits the insured from abandoning damaged property to the insurer.
A policy provision that specifies the insurer's post-loss position on the rejection of damaged property abandoned by the insured.
The movement of an extremity away from the body.
The trade advantage that a country has when it specializes in goods or services it produces more efficiently and trades them for the goods and services it produces less efficiently.
Liability imposed by a court or by a statute in the absence of fault when harm results from activities or conditions that are extremely dangerous, unnatural, ultrahazardous, extraordinary, abnormal, or inappropriate.
Liability imposed by a court or statute in the absence of fault or negligence.
A form of government led by a single ruler who selects advisers for assistance.
To apply the deductible to the actual loss before applying any coverage limits.
Death benefit paid to a policyowner during a terminally ill insured’s lifetime.
Depreciation that occurs more rapidly when an item is first purchased and then more slowly in subsequent years.
A device that measures acceleration, motion, and tilt.
The assent to an offer that occurs when the party to whom an offer has been made either agrees to the proposal or does what has been proposed.
A low-trust measure intended to reduce employee theft losses by limiting access to target property to a limited number of key employees.
A set of permissions linking a user with a specific information system object and specifying the level of access to that object, such as read, write, execute, or delete.
A security setting that controls an individual computer user's ability to review, enter, and change information in a claims information system.
A reinsurance treaty clause that gives the reinsurer the contractual right to inspect all of the primary insurer's records that pertain to the coverage provided by the treaty.
An increase or addition to property.
As defined in the BAC, includes continuous or repeated exposure to the same conditions resulting in bodily injury or property damage.
In workers compensation, the state in which the accident occurred.
A twelve-month period in which accidents have occurred, regardless of when the policy was issued or the claim was reported.
A random event, neither intended nor expected by the insured.
Provision in a life insurance policy that doubles (or triples) the face amount of insurance payable if the insured dies as a result of an accident.
Increases the face amount of the policy if the insured dies accidentally.
A method of organizing ratemaking statistics that uses incurred losses for an accident year, which consist of all losses related to claims arising from accidents that occur during the year, and that estimates earned premiums by formulas from accounting records.
An underwriting practice that accepts an otherwise undesirable risk at the request of the producer. Often the producer writes other types of business profitably for that client.
An agreement (accord) to substitute performance other than that required in a contract and the carrying out of that agreement (satisfaction).
Making sales to new customers.
A billing plan under which the producer pays the insurer the premiums due according to a billing statement prepared by the producer.
Making additional sales to existing accounts.
A format used to display balance sheet information in which assets are listed on the left-hand side of the page, and liabilities and stockholders’ equity are listed on the right-hand side.
The process to review the account by prioritizing and organizing in order to develop any sales action.
Selling new types of insurance products to existing clients.
A method of underwriting in which all of the business from a particular applicant is evaluated as a whole.
Sales activities such as increasing an account’s limits or adding coverage to existing policies to better cover the client’s needs.
A report attached to the financial statements that explains the accountant’s level of service provided and, in some cases, includes an opinion statement giving the accountant’s opinion regarding the financial statements as a whole.
The liability arising out of harm to clients and others caused by breach of an accountant's legal duty.
The classification, analysis, and determination of the appropriate method of reporting the effects of the bookkeeping records in an organization's financial statements.
A low-trust measure intended to limit employee theft losses by keeping track of cash flows and detecting any improprieties.
The date (month and year, or quarter and year) the transaction was entered on the insurer’s financial books; required on both premium and loss records.
The equation that relates assets to liabilities and owners’ equity.
The income for an accounting period determined by the application of a particular set of accounting rules to an organization’s financial events.
An accounting rule that requires financial statements to be prepared over relatively short time periods.
A measure of profitability that is found by dividing the annual net income by the average annual investment in a project.
A current liability representing monies owed by a business to its suppliers for goods and services rendered.
A current asset representing monies owed to a business by customers for goods or services rendered.
Form that covers losses (including uncollectible accounts) due to destruction of the insured’s records of accounts receivable.
Insurance that covers the sums the insured is unable to collect when records of accounts receivable are destroyed by a covered cause of loss.
An efficiency ratio that indicates how quickly a business collects the amounts owed by its customers.
A reinsurer that is otherwise unauthorized to do business in the same jurisdiction as the primary insurer but that is granted approval to assume reinsurance by meeting the state insurance department's requirements.
An accounting basis under which revenues and expenses are recorded as they are incurred rather than when cash is received or paid.
An accounting method that recognizes income in the accounting period in which it is earned and recognizes an expense in the accounting period in which it is incurred.
A depreciation valuation method that reflects the total amount that has been expensed up to the date of the financial statement.
A clause in open cargo policies that doubles the policy limit when, for reasons beyond the control of the assured, shipments accumulate at some point in transit.
The part of a savings program during which funds are accumulated.
The period during which a deferred annuity’s cash value is accumulated for eventual liquidation in periodic payments during the annuitization period.
Share in a variable subaccount's investment portfolio purchased by allocating variable annuity premiums and/or cash value to the variable subaccount.
In model performance evaluation, a model’s correct predictions divided by its total predictions.
The cup-shaped socket of the hipbone.
A liquidity ratio that provides a measure of a company’s ability to meet its current obligations if it cannot sell its inventory.
A type of application, developed by ACORD, that an insurer can use to obtain additional information for certain coverages or classes of business.
The purchase of one company’s stock by another company.
Costs incurred by an insurer consisting primarily of commission compensation paid to agents and brokers.
A natural and unavoidable catastrophe that interrupts the expected course of events.
The process of listening with mental and physical openness to more clearly determine a message's meaning.
A sensor that requires an external power source to execute its intended operation.
The actions required by organizational units or departments for completing a tactic.
A process that helps managers determine which activities must be performed, how activities should be grouped, and which priority each activity should have in the organizational structure in order to achieve the organization’s goals and objectives.
A record of all the activities and analyses that occur while handling a claim.
An injury management technique for allowing patients to continue enough physical activity to avoid complete disability while maintaining a tolerable comfort level.
A financial ratio that compares the level of sales with the account balance for various assets and measures how effectively management employs its resources to produce sales.
A standard that focuses on the activity undertaken to achieve a particular result regardless of the success of that activity.
Authority (express or implied) conferred by the principal on an agent under an agency contract.
A method in valuing property that is calculated as the cost to replace or repair property minus depreciation, the fair market value, or a valuation determined by the broad evidence rule.
Cost to replace property with new property of like kind and quality less depreciation.
For workers compensation purposes, the difference between a worker’s earnings before and after an injury.
The loss ratio achieved during a selected experience period.
A valuation method in business income policies designed to make the insured whole by demonstrating the actual amount of loss that occurs during the period of restoration.
Information that has been directly given to someone.
Hand delivery of a summons and complaint to a defendant.
A total loss of a vessel or cargo that occurs when the property is physically destroyed or is taken from its owner with no chance of recovery.
A department in an insurance company that performs ratemaking, verification of loss reserves, collection and analysis of insurer loss data to evaluate insurer profitability, analysis of data from other sources to determine the insurer’s competitive position, and preparation of statistical reports for management and regulatory authorities.
A ratemaking concept through which actuaries base rates on calculated loss experience to place insureds with similar characteristics in the same rating class.
The proposed rate change derived by actuarial analysis prior to company strategic influences.
A person who uses mathematical methods to analyze insurance data for various purposes, such as to develop insurance rates or set claim reserves.
A mechanical device that turns energy into motion or otherwise effectuates a change in position or rotation using a signal and an energy source.
Term describing a condition that typically has a sudden, severe onset and short duration and is often traceable to a specific event.
A gesture indicating a communicator's probable behavior.
Apply in addition to other policy limits and include claim expenses, first-aid, damage to property of others, and loss assessment.
A commercial property endorsement that enables the insured to cover selected items under the Building and Personal Property Coverage Form (BPP) that would otherwise be property not covered.
A person or an organization that is added to an insurance policy as an insured, usually by endorsement to the policy.
An endorsement that adds coverage for one or more persons or organizations to the named insured’s policy.
A coverage in homeowners policies that indemnifies the insured for the additional expenses that are incurred following a covered property loss so that the household can maintain its normal standard of living while the dwelling is being restored.
A balance sheet value that represents any excess value of stock over par value.
Occurs when a judge uses his or her discretion to increase a jury verdict award that is deemed insufficient.
In a no-fault system, a plan that provides certain personal injury protection (PIP)-type benefits such as medical payments and disability coverages to injured victims, without regard to fault.
The movement of an extremity toward the body.
The legal proceeding that an insurer, the employer, or a claimant must follow to dispute a workers compensation settlement.
For life insurers, the sum of the statutory capital, asset valuation reserve, and certain other conditional reserves.
A person responsible for investigating, evaluating, and settling insurance claims.
Expenses other than those included in defense and cost containment, such as those related to determining coverage, adjusting services, and settling claims.
Costs of adjusting a claim that relate to the overall operation of an insurer's claim function.
An act, a decision, a recommendation, or an omission made by a government official or agency within the authority of that office or agency.
An official governmental body that is empowered with the authority to implement and administer particular legislative acts.
A series of books containing a state’s administrative laws.
The statutory laws that grant power to administrative agencies to act and the body of law that is created by administrative agencies themselves.
The individual appointed by a probate court to administer a decedent's estate when the decedent has died without leaving a will (intestate).
An individual appointed by a probate court to administer the estate of a deceased person who left a will, but failed to appoint an executor, or whose appointed executor did not meet court approval or declined to serve as executor.
An individual appointed by a probate court to replace an original administrator cum testamento annexo who died, resigned, or was discharged before completing the estate administration.
An individual appointed by a probate court to replace an original administrator who died, resigned, or was discharged before completing the estate administration.
An individual appointed by a probate court to temporarily preserve the assets of a decedent’s estate when the will is contested and the person named executor cannot qualify, or when a regular or permanent administrator cannot be appointed for some other reason.
Legal proceedings that involve waterways and seas, including vessels, transportation of people or cargo by ship, vessel personnel, harbors, and virtually all matters related to waterways.
A specialized branch of federal law pertaining to claims for occurrences that take place on navigable waters and are connected with maritime activity.
A court bond produced for legal matters that relate to the sea or waterways.
Factual statements that, unless denied, bind the party at trial.
A premium base that reflects the insured's liability exposure arising from the number of persons, other than employees of the insured, admitted to an insured event or to events conducted on the insured's premises.
Statements against the personal, pecuniary, or proprietary interest of a witness that subject him or her to civil or criminal liability.
Assets meeting minimum standards of liquidity that an insurer is allowed to report on its balance sheet in accordance with statutory accounting principles.
Insurance provided in a jurisdiction by an insurer that is licensed to do business in that jurisdiction.
An insurer to which a state insurance department has granted a license to do business within that state.
See Standard market.
The distribution system consisting of admitted insurers and their producers.
The premium that a shipowner pays to its P&I club at the beginning of a coverage year.
A payment made to a claimant following a loss to cover the immediate expenses resulting from that loss.
A partial payment to a third-party claimant that is issued before obtaining a signed release.
A bond that guarantees that the contractor will use advanced funds for their intended purpose.
A document that helps keep track of payments made under certain coverages, helps comply with unfair claims practices laws, and clarifies to the insured that the advance payments will be applied against the final claim.
Increasing claims costs for which the reserves are inadequate.
An opinion rendered by an auditor that indicates that the financial statements do not fairly present the financial position of a company and that explains the reasons for this conclusion.
The claim of ownership of land by possession that is exclusive, open, hostile, unpermitted, and continuous for a statutory period.
In general, the tendency for people with the greatest probability of loss to be the ones most likely to purchase insurance.
The decision to reinsure those loss exposures that have an increased probability of loss because the retention of those loss exposures is undesirable.
A written interpretation of the CPCU Code of Professional Conduct provided by the Board of Ethical Inquiry.
An independent organization that works with and on behalf of insurers that purchase or subscribe to its services.
An independent organization, working with and on behalf of insurers that purchase or subscribe to its services, that collects and reports loss experience but, unlike rating bureaus, does not use these data to prepare and file rate filings.
Insurance rates developed by an organization—a rating bureau for member organizations—that prepares all or parts of rate fillings and submits them to regulators on behalf of it members.
A person who provides information on an affidavit and promises that it is true.
A signed statement summarizing efforts to find coverage from admitted insurers.
Financing technique to fund losses from a combination of premiums paid by the parent to the captive for an insurance policy, from investment income on those funds, and from reinsurance purchased from other insurers.
A reinsurance treaty clause that broadens the treaty's scope to include the primary insurer's affiliated companies.
Insurers that have a relationship with one another in some way.
A type of group marketing that targets various groups based on profession, association, interests, hobbies, and attitudes.
A written plan that the federal government requires of employers with federal contracts, detailing how the employer will meet hiring goals for groups the law protects from discrimination.
A policy condition that is supposed to exist on the date that the warranty is made.
A guarantee that specific facts exist at the time a contract forms.
A social goal of insurance that states that a ceiling placed on rates keeps coverage available so people can purchase it, that rates are determined so that they transfer a portion of the costs of coverage from high-risk insureds to the remaining insureds, or that a subsidy from outside the insurance mechanism offsets premiums that are deemed unaffordable.
An advertising budgeting method with which an organization focuses all its internal resources on operations and production and allocates what remains to advertising.
A new vehicle part that is made by a manufacturer other than the vehicle manufacturer.
A minor earthquake following a greater one and originating at or near the same place
A classification of vehicles based on the vehicle's model year.
A report used to determine which customers are behind in paying their premiums; usually generated in thirty-day past-due increments.
A legal, consensual relationship that exists when one party, the agent, acts on behalf of another party, the principal.
A payment procedure in which a producer sends premium bills to the insured, collects the premium, and sends the premium to the insurer, less any applicable commission.
An insurer billing system that requires the agency to perform certain premium handling tasks, including invoicing and crediting, collecting premiums, investing premiums, and remitting premiums, to companies (less any applicable commissions).
One party appoints another party to act on its behalf, usually with a written agreement outlining the scope of representation.
An agency relationship created by a principal's words or conduct that cause a third party to reasonably believe that an agency exists.
The principal affirms that agency has existed and accepts the previous acts as the acts of an agent on the principal’s behalf.
A type of group captive that is owned by insurance agents or brokers rather than by the organizations insured.
A written agreement between an insurer and an agent that specifies, among other things, the scope of the agent's authority to conduct business for the insurer.
The costs associated with managing the relationship between agent and principal.
The costs associated with managing the agency (principal-agent) relationship between shareholders and corporate decision makers.
The record of an insurance agency's present policyholders and the dates their policies expire.
A system that integrates customer, policy, and accounting information with service and sales information, insurer communications, and information about other agency operations.
The electronic exchange and communication of data between agencies and companies.
In the agency relationship, the party that is authorized by the principal to act on the principal's behalf.
A relationship in which the producer is legally bound to the principal.
Circumstances surrounding a loss that elicit emotional responses that influence juries’ assessments of damages.
An increasing in seriousness or severity; an act or circumstance that intensifies or makes worse.
A deductible that limits the total amount of losses retained during a year.
The total amount of unfinished work.
A deductible that applies collectively to all losses occurring during a specific period, typically a policy year.
Insurance that covers losses only after the insured has retained a stated amount of aggregate loss during the policy period.
An excess liability policy that requires the insured to retain a specified amount of loss from the first dollar during a specified period of time, usually one year; the insurer then pays all loss for that period that exceeds the retention, up to the policy limit.
A type of excess of loss reinsurance that covers aggregated losses that exceed the attachment point, stated as a dollar amount of loss or as a loss ratio, and that occur over a specified period, usually one year.
A type of excess of loss reinsurance that covers aggregated losses that exceed the attachment point, stated as a monetary amount of loss or as a loss ratio, and that occur over a specified period, usually one year.
A reinsurance agreement under which the reinsurer begins to pay when all of the primary insurer's losses for some stated period of time exceed the retention stated in the treaty.
A type of excess of loss reinsurance that covers aggregated losses that exceed the attachment point, stated as a dollar amount of loss or as a loss ratio, and that occur over a specified period, usually one year.
The maximum amount an insurer will pay for all covered losses during the covered policy period.
Purchase of reinsurance by an insurer as protection against an existing portfolio of claim liabilities that is developing adversely beyond a specified level.
A provision in an excess of loss insurance or a reinsurance policy that provides coverage for aggregated retained losses, subject to a per-loss retained limit.
An excess liability policy that requires the insured to retain a specified amount of loss from the first dollar during a specified period of time, usually one year; the insurer then pays all loss for that period that exceeds the retention, up to the policy limit.
A business that offers similar products or services from several organizations on its customers’ comparison website and then collects a referral fee from those organizations when a customer uses the site tools or links.
A method of valuing property in which the insurer and the insured agree on the property's value at the time the policy is written and that states the amount in the policy declarations as the amount the insurer will pay in the event of a total loss to the property.
A method of valuing property in which the insurer and the insured agree, at the time the policy is written, on the maximum amount that will be paid in the event of a total loss.
Optional coverage that suspends the Coinsurance condition if the insured carries the amount of insurance agreed to by the insurer and insured.
One party’s offer and another party’s acceptance of that offer.
An endorsement for adding cargo liability coverage to the AIMU Protection and Indemnity Clauses.
A standard P&I form used in the American fixed-cost market.
An automatic fire sprinkler system that discharges foam and high-expansion foam; often used to protect aircraft hangars and petrochemical storage areas.
The coverage that can be added to an airport liability policy to insure the sponsor of an air meet against liability arising out of the hazardous loss exposures associated with such events.
Insurance that covers liability due to the insured’s ownership, maintenance, or use of aircraft; physical damage to aircraft owned or used by the insured; and other aircraft loss exposures.
Interpreted by the ISO homeowners policy as any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people.
A purpose-of-use category referring to the operation of international, national, and regional air carriers.
A non-profit organization that facilitates the sale of standard transportation documents and processing for records and funds.
A liability insurance policy that addresses the loss exposures unique to airport owners and operators, as well as fixed base operators.
An operational sequence used to solve mathematical problems and to create computer programs.
An assertion that the party in question was elsewhere at the time the crime occurred.
A citizen of another country who lawfully enters the U.S.
A corporation chartered in a country other than the country in which the corporation is doing business.
An insurer domiciled in a country other than the United States.
An insurer domiciled in a country other than the one in which it seeks to conduct, or is conducting, business.
Ensures that employees understand their tasks, how the tasks should be accomplished, and why the tasks are performed (what to do, how to do it, and why they are doing it).
Residual agency costs that remain because monitoring and bonding efforts do not fully control the principal-agent conflicts between managers and owners.
Perils similar to those specifically named in the Perils Clause of an ocean marine insurance policy.
A claim made in the complaint by the plaintiff, specifying what the plaintiff expects to prove to obtain a judgment against the defendant.
A condo association’s interest when it owns and is responsible for all interior and exterior items within the individual condo unit at the time of the original purchase by the unit owner.
A concept of condominium ownership that is similar to the single-entity concept except that the all-in concept includes improvements made by the unit owner, not just the original installations or replacements of like kind and quality.
All fees for captive fronting services, including pure front costs, claims handling, loss control, risk charges, taxes, and commissions.
The expense an insurer incurs to investigate, defend, and settle claims that are associated with a specific claim.
The amount of money paid (paid ALAE) or expected to be paid (outstanding ALAE) by the insurer for legal and other related costs associated with settling the specific claim under the coverage indicated by the statistical codes on the transaction record.
An insurance policy that covers any risk of physical loss unless the policy specifically excludes it.
Something done to a written instrument that changes its meaning or terms without the consent of all parties to the instrument.
The endorsement that extends workers compensation and employers liability coverage to an additional organization named in the endorsement.
Procedures to help settle disputes without litigation, including arbitration, mediation, and negotiation.
Distribution channels used by insurers that elect not to use an agency force to obtain and service customers; frequently the channels are technology driven (Internet, interactive voice response) and are combined with traditional distribution channels.
An expanded liability concept that shifts the burden of proof to each of several defendants in a tort case when there is uncertainty regarding which defendant’s action was the proximate cause of the harm.
The probability that any one of two or more events will occur within a given period.
Risk financing techniques that do not fall into the category of guaranteed-cost insurance and generally involve some retention of risk.
Those risk financing measures that do not fall into the category of guaranteed cost insurance.
Unselfish concern for the welfare of others or selflessness; in ethics, the principle that the general welfare of society should take precedence over one’s own interests.
Documents, prepared by centers providing outpatient surgical and diagnostic treatment, that include patient identification, history of illness or injury, physical findings, diagnostic and therapeutic orders, clinical observations, disposition of the patient, and follow-up care.
The endorsement that modifies the CGL coverage form so that subpart f. of the insured contract definition will not include bodily injury or property damage caused solely by an indemnitee of the named insured.
The endorsement that replaces the CGL coverage form’s Liquor Liability exclusion with a stricter exclusion of liquor liability resulting from the named insured’s manufacturing, selling, distribution, serving, or furnishing of alcoholic beverages.
Additional policy pages (also known as state exception pages) designed to alter the standard Personal Auto Policy’s wording to conform to each state’s requirements.
A professional organization of actuaries that performs certain educational, public relations, government relations, disciplinary, and other functions on behalf of various actuarial professional bodies.
An organization that administers the arbitration process.
A national insurance advisory organization that develops policy forms, manual rules, and rating information used by U.S. property-casualty insurers.
Policy that covers the same shipments as the assured's open cargo policy against loss resulting from war perils while the covered property is aboard an overseas vessel.
An insurance form used in the American market to insure vessels under construction; includes hull, collision liability, and P&I coverage.
A hull insurance form designed specifically for insuring lakers, the vessels used for transporting bulk cargoes on the Great Lakes.
A hull insurance form that is commonly used in the U.S.; covers particular average or total loss of the insured vessel, sue and labor expenses, general average and salvage, and the assured's liability for collision damage to other vessels and their cargoes.
An endorsement that modifies a hull insurance policy to cover loss caused by war, strike, riot, piracy, seizure, or related perils.
A form for supplementing an AIHC policy with additional amounts of coverage for actual or constructive total loss of the vessel, general average and salvage, sue and labor charges, and collision liability.
An endorsement designed to be attached to the AIHC when the insured vessel will be laid up and out of commission for the entire policy period or longer.
An insurance form for covering a ship repairer's liability for customers' vessels in the ship repairer's care, custody, or control; also provides limited coverage for damage to property of others resulting from operation of a vessel in the ship repairer's care, custody, or control.
An endorsement for insuring a vessel against many of the non-war perils (such as strikes, riots, and civil commotion) excluded by the AIHC.
Trading warranties that are commonly added to AIHC policies covering oceangoing vessels that have been classified for full ocean operation.
A hull insurance form designed for insuring tugboats and barges, which includes collision and tower's liability coverage.
A tax credit that reduces one's tax liability for money spent each year on qualified higher educational expenses and, being refundable, is even available to taxpayers who have no federal income tax liability and is paid to such taxpayers as a tax refund.
Prohibits discrimination against a qualified individual with a disability because of that disability.
An accounting recognition of the difference between a bond’s purchase price and face value from purchase date to maturity.
A loan that requires the borrower to make payments consisting of both principal and interest over the duration of the loan.
A value that reflects the payment of principal and interest over time.
The value received from the sale or exchange of a capital asset.
The total value exposed to loss at any one location from any one event.
Chest pain resulting from reduced blood flow to the heart.
Insurance that covers loss of valuable animals by (1) death resulting from accident, injury, sickness, or disease or (2) theft, subject to exclusions.
An examination to observe nerve function in response to an external stimulus. The examiner strikes the patient’s Achilles tendon with a rubber hammer to test reflexes related to the L4-L5 disks and the S1-S2 disks. A diminished ankle jerk reflex may indicate sciatic nerve entrapment.
The immobility of a joint.
The specific day and month that a policy initially became effective.
A provision in which the primary insurer retains its normal retention on each loss plus an aggregate amount of the total losses during the year, up to the aggregate deductible amount.
An exclusion that allows people to give ordinary, small gifts of present interest without incurring a gift tax.
A source of accounting information of a publicly held company that contains a description of the company’s background and growth and an analysis of the previous year’s operation; prepared by the management of the company.
A report to the state insurance department on the insurer's financial results, including premiums, losses, expenses, assets, and liabilities.
An organization’s financial report as of the end of the fiscal or tax year.
Policy that covers all shipments made or received by the insured throughout a one-year policy period.
The person insured under the annuity.
The period of time, sometimes referred to as the distribution period, during which a deferred annuity’s cash value is systematically liquidated through periodic payments.
A type of life insurance policy or contract that makes periodic payments to the recipient for a fixed period or for life in exchange for a specified premium.
A series of fixed payments made on specified dates over a set period.
A tax-deferred savings vehicle designed to accumulate a sum of money and then to liquidate it, usually as monthly income; often used for retirement.
A savings or investment product that will pay out its cash value at retirement or death of the owner.
A contract that makes periodic payments to the recipient for a fixed period or for life in exchange for a specified premium.
The specified sum that an individual pays an insurance company in exchange for the promise of guaranteed annuity payments.
A series of equal periodic payments made at the beginning of each period.
The type of annuity contract selected by the owner; may be single life annuity, qualified joint and survivor annuity (QJSA), other joint life and last survivor annuity forms, etc.
The person or entity who owns the rights under an annuity contract.
The risk of loss of capital that occurs when a retired employee or spouse who is the owner of the annuity dies.
The date in a deferred annuity contract when periodic payments, based on the annuity’s cash value, are scheduled to begin.
The current value of the retirement variable annuity investment fund, converted into units of retirement income; the annuitant receives an income of a certain number of calculated “annuity units” per month.
A document filed in court by a defendant responding to a plaintiff's complaint and explaining why the plaintiff should not win the case.
Two ligaments that crisscross inside the knee and prevent abnormal forward and backward movement of the knee.
A carrier's interest in freight for which there are no definite engagements but for which the carrier can reasonably expect to obtain engagements.
A party’s unequivocal indication before contract performance is due that he or she will not perform when performance is due.
State laws that prohibit depositing funds (premiums) due to insurers into agency operating or personal accounts, that is, commingling of funds.
A law that prohibits insurers from returning portions of premiums and producers from returning portions of commissions—that is, rebates—to persons who purchase insurance.
A disorder characterized by a pattern of socially irresponsible, truant, cruel, and often deviant behavior.
A feeling of apprehension, tension, dread, or uneasiness that may be caused by specific external threats or by internal psychological conflicts.
A mental condition characterized by symptoms of anxiety or behaviors that are performed to relieve anxiety, such as post-traumatic stress disorder, panic disorders, phobias, obsessions, compulsions, and generalized anxiety disorder.
Refers to any auto owned, rented, leased, or otherwise possessed by the insured or anyone else.
A third party’s reasonable belief that an agent has authority to act on the principal’s behalf.
A request to a higher court for a review of a case.
A judicial bond guaranteeing that a plaintiff who appeals an adverse decision to a higher court will pay all court costs of the appeal.
The losing party in a court case who appeals the case to a higher court.
An appeals court at any level of government.
The power of a court to hear appeals from another court.
The winning (nonappealing) party in a court case, against whom the losing party appeals to a higher court.
The amount of wealth that a person is able to pass on to others, free of federal estate tax, as a result of the one-time applicable credit amount (unified credit).
A CPCU student who has submitted a matriculation form that has not yet been approved.
A legal document that provides information obtained directly from an applicant requesting insurance and that an insurer can use for underwriting and claims handling purposes.
A preprinted form in which the applicant provides the insurer’s name, intended home address, corporate organizational form, and lines of business it seeks authority to write.
A set of tools and protocols built into a program that allow developers to extract data from that program.
Assigning to an injured worker’s current employer only the portion of the worker’s permanent disability that occurred while in the current employment.
A clause that limits the company’s liability to the same proportion of the total loss which that company’s coverage bears to the total coverage on the property.
A method of resolving disputes between insurers and insureds over the amount owed on a covered loss.
A policy provision that prescribes a method for resolving a disputed claim about the value of property or the amount of a property loss.
A condition that establishes a method for the insurer and the insured to resolve disputes about the insured property’s value or amount of loss.
A position in any stock, debt instrument, or partnership interest (with certain exceptions) in which there would be gain if the position were sold or otherwise terminated at its fair market value.
A conditional receipt that reflects the insurer’s intention not to be bound by the receipt until the application is approved.
Under an open cargo policy, a vessel possessing specified age, tonnage, and classification society attributes; the assured's failure to ship on an approved vessel results in an additional rate called a steamer additional.
Under an open cargo policy, a vessel possessing specified age, size, and classification society attributes.
An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a settlement, which can be final and binding.
A reinsurance treaty clause that states that an arbitration process will be used to resolve disputes between the parties to the treaty.
A clause in an agency contract that provides a formal method for the agency and insurer to resolve disagreements arising under the contract.
A process in which the parties first present their cases to an arbitrator who decides a confidential award amount. The parties proceed to mediation. If the parties reach an agreement, the award is never revealed. If they do not reach agreement, the arbitrator’s award determines the amount.
A premium base that reflects the insured's liability exposure based on the total number of square feet of floor space at the insured's premises.
Protection that a burglar alarm system can provide by detecting entry into specific areas within a facility.
A measure of central tendency; the average, which is the sum of the values divided by the number of observations.
The seizure of a vessel, its cargo, or any freight against which a lien arises.
A pathway in a classification tree.
The deliberate setting of fire to property for a fraudulent or malicious purpose.
A team of specialists used by municipalities and provided with special equipment to vigorously investigate and detect arson-for-profit cases, which are then prosecuted; coordinates efforts with police departments and district attorneys or other prosecutors.
Hardening of the arteries.
A procedure that permits the surgeon to look directly at the injury and remove any “flaps” protruding from the meniscus with a blunt hook.
A procedure that permits the surgeon to look directly at the injury and remove any “flaps” protruding from the meniscus with a blunt hook.
An award designed to increase awareness of continuous improvement among organizations involved in risk management and insurance.
A document prepared during the formation of a corporation stating the corporation’s goals and objectives and the kind of business for which the corporation was organized.
A legal document that specifies each partner’s financial and managerial responsibilities toward one another.
A tug and barge combination that involves the use of a tug to push a barge that has been built with a notch in its stern that matches the shape of the tug's bow.
Computer processing or output that simulates human reasoning or knowledge.
The ability of machines to simulate human intelligence.
The adjusted amounts for items included in financial statements that are used for underwriting purposes.
An insurance policy written for asbestos abatement contractors that is essentially a CGL policy that includes coverage for liability arising out of asbestos.
An insurance policy written for asbestos or lead abatement contractors that is essentially a CGL policy that includes coverage for liability arising out of asbestos or lead.
The amounts for items included in financial statements.
The price at which a dealer is willing to sell a security.
Persons, other than passengers or members of the crew, who steal or attempt to steal property by violence or force.
The threat of force against another person that creates a well-founded fear of imminent harmful or offensive contact.
A portion of a vehicle that is made up of several parts but when combined, the parts form a unit.
As used in chiropractic practice, a qualitative or quantitative description of a patient’s condition based on an examination of information about a patient’s state.
A process that analyzes the ability of an insurer’s assets to meet its liabilities.
The apportioning of investments among categories of assets.
A category of hybrid funds that are required to maintain a fixed weighting (asset allocation) of stocks, bonds, and perhaps money market instruments. Thus, they may enable investors to implement an asset allocation strategy through the purchase of one mutual fund, rather than several funds or other assets.
The allocation of the investments in a portfolio to only one asset class (e.g., stocks or real estate) or even to just a few issues within an asset class.
In asset allocation, a portfolio that is not diversified among several asset classes.
The risk that an asset's value will be lower than expected.
A ratio that emphasizes the efficiency of the company's use of its assets.
A reserve account required by the National Association of Insurance Commissioners (NAIC) for the purpose of offsetting credit-related investment gains and losses.
A financial instrument collateralized by a pool of loans, leases, or other receivables.
An accounting approach that focuses on the value of assets or liabilities that exist as of the balance sheet date.
Types of property, both tangible and intangible, owned by an entity.
A plan, similar to an unsatisfied judgment fund, in which the state assigns insurers to pay benefits deemed necessary to compensate victims of uninsured accidents.
A program that makes insurance available to those who cannot obtain coverage because private insurers will not voluntarily provide it.
The individual or entity to whom property, rights, or interests have been transferred.
A fiduciary appointed by a state insolvency court to benefit the creditors forcing the insolvency.
The transfer of rights or property.
A policy provision that prohibits an insured from transferring ownership of an insurance policy to another party without the insurer's written consent.
The party to a contract who makes an assignment.
An organization of member companies that reinsure by fixed percentage the total amount of insurance appearing on policies issued by the organization.
A group captive sponsored by an association.
A group captive insurer sponsored by an association for the benefit of its members.
A state insurance department’s financial audit of an insurer on behalf of all states in a zone in which the insurer holds licenses.
Examining data to discover new and interesting relationships among attributes that can be stated as business rules.
A defense to negligence that bars a plaintiff's recovery for harm caused by the defendant's negligence if the plaintiff voluntarily incurred the risk of harm.
A defense to negligence that bars a plaintiff's recovery for harm caused by the defendant's negligence if the plaintiff voluntarily incurred the risk of harm.
A defense to negligence that bars a plaintiff’s recovery for harm caused by the defendant’s negligence if the plaintiff voluntarily incurred the risk of harm.
In ocean marine policies, the party named as the insured.
In marine policies, the party named as the insured.
Situation that ensues when one party in a transaction has access to information that is not available to other parties in the transaction.
A theory based on empirical research that indicates company managers have a preferred order for obtaining capital for financing investment and do not constantly seek to identify and move towards an optimal structure.
The theory that managers have better information about the future prospects for the firm and will take advantage of their inside knowledge when raising external capital.
A reinsurance audit that a reinsurer conducts on a primary insurer's operations after the reinsurer has made a commitment to the primary insurer.
The act of seizing property to secure a judgment.
An admiralty remedy involving the action of seizing or taking legal custody of a vessel or property.
A judicial bond guaranteeing that, if the court decides against a plaintiff who has requested attachment of the defendant’s property, the defendant will be paid any damages that result from the property attachment.
The dollar amount above which the reinsurer responds to losses.
The monetary amount above which the reinsurer responds to losses.
A patient’s family physician who has primary responsibility for the patient and the patient’s medical disposition.
A condition of carelessness or indifference that increases the frequency or severity of loss.
An officer in each state who typically heads an executive department authorized to enforce the state’s criminal laws.
A written opinion describing the attorney general’s understanding and interpretation of a specific state law or regulation, issued upon a state official’s request.
The work and communications between a client and an attorney that are not discoverable by the opposing party in an action. This is based on the rationale that clients should be able to trust and confide in legal counsel to obtain the best possible defense.
In a reciprocal insurance exchange, the contractually authorized manager of the reciprocal who administers its affairs and carries out its insurance transactions.
A dangerous object or condition so captivating to young children that it entices them onto another's property.
A doctrine treating a child as a licensee, or guest, rather than a trespasser on land containing an artificial and harmful condition that is certain to attract children.
A variable that describes a characteristic of an instance within a model.
A standard defining the attributes of organizations and individuals performing internal auditing.
The process of assigning or ascribing a characteristic or quality to a person or an object.
Employment for an indefinite duration that can be terminated by either party for whatever reason or no reason at all.
A medical specialist who evaluates, diagnoses, and treats patients for hearing loss.
A systematic investigation of records, documents, systems, and operations.
A board committee that, in conjunction with the corporation's external auditors, oversees preparation and dissemination of the corporation's financial statements.
A report prepared by an independent certified ­public accountant (CPA) that expresses a professional opinion as to the fairness of the company’s financial statements; accompanies a company’s audited financial statements.
The probability of generating inaccurate audit reports because of the failure to detect or properly interpret properly material factors in the premium base.
The documentation of the flow of information from the original source to the general ledger; is used to validate or invalidate accounting entries.
An auditing method for determining the appropriate payroll-based exposure amounts and classifications (gross payroll minus payroll of exceptions); used when most employees are in the same classification.
A standard issued by the Public Company Accounting Oversight Board that applies when an auditor is engaged to audit management’s assessment of the effectiveness of internal control over financial reporting.
A technology that integrates a digital experience into a user’s physical environment.
A designated dollar amount assigned to claims personnel to limit the reserve amounts they can set and the payment amounts they can make.
The reinsurer's offer to reinsure the loss exposure at a certain premium and under specific terms and conditions.
The amount of capital determined using a risk-based capital formula.
An insurer to which a state insurance department has granted a license to market and service particular lines of insurance in that state.
The manual rate or any other rate that has been authorized by the appropriate insurance regulatory authority for use by the carrier.
A reinsurer that is authorized to do business in the primary insurer's state of domicile.
As defined in commercial general liability and auto forms, a land motor vehicle, trailer, or semitrailer designed for travel on public roads, including attached machinery or equipment; or any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law in the state where it is licensed or principally garaged.
An insured in the business of selling new or used vehicles.
The ISO coverage form designed to meet the auto, general liability, and errors and omissions liability insurance needs of auto and trailer dealers.
Laws enacted to ensure that motorists have the financial ability to pay for any property damage or bodily injury they might cause as a result of driving or owning an auto.
Insurance that covers an insured's legal liability arising out of the ownership, maintenance, or use of an automobile.
Coverage for medical expenses incurred by occupants of a covered auto, regardless of whether the auto’s driver was at fault in the accident.
The endorsement to the Business Auto Coverage Form that covers medical expenses of the named insured (if an individual) and other persons injured in auto accidents, regardless of legal liability.
State statutes that require motorists to purchase (or require insurers to make available) insurance that provides minimum first-party benefits to injured persons regardless of fault.
Coverage for damage to or theft of a covered auto that can include both collision coverage and other than collision (comprehensive) coverage.
Coverage for damage to or theft of a covered auto that can include both collision coverage and other than collision (comprehensive) coverage.
The lowest temperature to which a substance must be heated for it to ignite without a separate ignition source.
An electronic payment network used by individuals and businesses.
Automatic coverage changes made to an account at renewal to bring it up to minimum standards.
An automatic sixty-day period following a policy’s expiration date during which the insured can report claims events that occurred before policy expiration.
A fire detection system that consists of mechanical or electronic detectors that sense the presence of smoke or fire and sound an alarm.
A system that uses water, chemicals, carbon dioxide, and foam as extinguishing agents.
The insurer automatically borrows enough money from the cash value of the policy to keep the policy in force, should the owner be unable to make the premium payment.
Fire sprinkler systems with a series of interconnected valves and pipes with sprinkler heads. Each sprinkler head usually contains a heat-sensing element that responds individually to the heat generated by a fire.
Plan for insuring high-risk drivers in which all auto insurers doing business in the state are assigned their proportionate share of such drivers based on the total volume of auto insurance written in the state.
An insurance management organization and service provider for insurance industry groups responsible for administering the shared automobile insurance market.
Factors that affect loss statistics in the form of modifying credits, such as driver education credits and good-student discounts.
Classes of exposures such as age, gender, geographic location, type of use, and marital status.
A scientifically detailed examination of the body of the deceased in an effort to determine the cause of death.
A type of signaling system that is connected to an existing municipal fire alarm system on the same circuits that carry signals from the street fire alarm boxes.
A social goal of insurance that states that insurance is accessible to those who want or need it.
The delay between when a company receives a check and when it is cleared at the bank.
The amount of funds in an account that can earn interest, compensate for bank services, or be withdrawn.
A term used to describe a body part that does not have blood vessels or that has a poor blood supply.
A partial loss of vessel or cargo.
A professional who specializes in handling general average adjustments.
The long-term average loss expected in any one year that represents the loss cost for the in-force polices for the cause of loss being modeled.
The rate of return on an investment calculated by dividing the total rate of return by the number of years the investment is held.
A method to establish a case reserve by using an average amount for specific categories of claims.
A calculation in the development of hired auto premium under a Motor Carrier Coverage Form that represents the average premium for all owned and leased autos.
A group of provisions in an open cargo policy that state the extent to which the policy covers particular average losses.
A case reserving method that establishes a predetermined dollar amount of reserve for each claim as it is reported.
A case reserving method that establishes a predetermined monetary amount of reserve for each claim as it is reported.
An average of a statutory period of earnings to determine an employee’s workers compensation disability benefits.
A risk control technique that involves ceasing or never undertaking an activity so that the possibility of a future loss occurring from that activity is eliminated.
A technique that involves ceasing or never undertaking an activity so that the possibility of future gains or losses occurring from that activity is eliminated.
An examination to detect symptom magnification or fabrication of pain. The examiner places both hands on the standing patient’s shoulders and lightly presses down.

B

An examination to observe nerve function in response to an external stimulus. The examiner runs a pointed object along the bottom of the patient’s foot and observes how the great toe extends when the foot is stroked. A great toe that flexes backward may indicate a lesion.
A mutual fund that imposes a sales charge when funds are redeemed.
The process of putting earth back against the foundation after the foundation is completed.
Transporting goods for others when the motor carrier would otherwise be operating an empty vehicle during a return trip.
The gross profit that remains in the backlog and contributes to future earnings.
A financial backlog relativity guideline for bonding credit extensions. Bonding companies prefer a shareholders (owners) equity ratio equal to approximately 10 percent of backlog.
A financial backlog relativity guideline for bonding credit extensions. Alternatively expressed as a ratio of working capital or as a percentage of backlog.
The balance of work to be performed on uncompleted contracts, or the estimated cost to complete the work outstanding, or the amount yet to be billed. Alternatively referred to as unfinished work.
A Perl function that can manage strings of data that change slightly from one instance to another.
Any account receivable that is considered uncollectible.
An insurer's denial of coverage without cause, which can result in extracontractual damages, punitive damages, or both.
An intentional or reckless act, extreme or outrageous in nature, causing severe emotional distress that results in physical injury; generally applied in suits for breach of insurance contracts.
A claim that implies or involves actual or constructive fraud, a design to mislead or deceive another, or a neglect or refusal to fulfill some good-faith duty or some contractual good-faith obligation.
Damages awarded for a bad-faith cause of action, often when a defendant insurer is found to have engaged in unreasonable conduct either with knowledge that it is unreasonable or with complete disregard of the fact that it is unreasonable.
A bond that guarantees that the accused insured will appear in court at the time designated for the trial or hearing.
The party temporarily possessing the personal property in a bailment.
A policy that covers damage to customers’ goods while in the possession of the insured, regardless of whether the insured is legally liable for the damage.
The temporary possession by one party (the bailee) of personal property owned by another party (the bailor) for a specific purpose, such as cleaning or repair.
The temporary transfer of a property's custody.
A contract that requires the bailee to keep the property in safekeeping for a specific purpose and then to return the property to the bailor when the purpose has been fulfilled.
A bailment in which the bailee owes a high duty of care to safeguard the bailed property from loss or damage.
A bailment in which the bailee owes only a slight duty of care to safeguard the bailed property from loss or damage.
A bailment in which the bailee owes a duty of ordinary care to safeguard the bailed property from loss or damage.
The owner of the personal property in a bailment.
The financial statement that reports the assets, liabilities, and owners' equity of an organization as of a specific date.
A performance measurement tool used in strategic management to establish goals related to strategy implementation.
Debt capital financing that can be converted into equity by the lender as the loan goes into default (also known as mezzanine financing).
A method of construction that uses long wall studs that extend from the ground on up to the second floor.
An amortized loan with payments based on an amortization period longer than the loan period with the remaining loan balance payable on the due date.
A document that specifies the amount and terms of the available line of credit.
The process by which a bank statement is compared to canceled checks and a check register to reveal outstanding checks and to verify the accuracy of the records.
A time draft payable to a seller of goods, with payment guaranteed by a bank.
A life insurance policy purchased to insure the life of certain employees, usually officers and other highly compensated employees, in order to fund employee pension and benefit plans for noninsured employees.
An insurer’s financial situation when its liabilities exceed the market value of its assets.
The body of federal law that allows debtors who are unable to pay their creditors to divide their assets among their creditors to discharge the debts.
A policy provision stating that the insurer is obligated to pay claims on behalf of an insured who is bankrupt.
Legislation that defines creditors' rights and provides relief to debtors who, with or without fault, have contracted debts beyond the ability to pay.
A charterer that agrees to be responsible for actually operating and insuring the vessel.
A concept of condominium ownership in which the association has no ownership interest within the bare walls of each unit.
A deed that transfers real property to a buyer for valuable consideration but that lacks any guarantee from the seller about the validity of the title.
A cargo vessel that typically has no means of self-propulsion and therefore must be propelled by a towboat or a tug.
Serious misconduct by the vessel’s master or crew that is contrary to the owner’s interest.
A systematic process that can be used to identify physical, administrative, and procedural barriers or controls that should have prevented the accident.
A methodical process used to identify causal factors stemming from physical, administrative, and procedural barriers or controls that should have prevented an event from happening.
The basic cost of specific insurance policies.
The rate (or cost) per unit of coverage required to cover the insurer's losses, expenses, and profit for a line of business.
A process in which each side presents its case to the arbitrator along with its final, realistic monetary offer. The arbitrator weighs the facts and evidence presented, then chooses one of the two figures.
Personal lines and small commercial accounts.
The category of an employer's business found in the Basic Manual for Workers Compensation and Employers Liability Insurance (Basic Manual).
An ISO homeowners form covering a limited number of causes of loss.
The minimum amount of coverage for which a policy can be written; usually found in liability lines.
A manual developed by the National Council on Compensation Insurance (NCCI) that specifies the rules and procedures for writing workers compensation insurance.
Coverage for medical expenses, such as hospital and surgical expenses, physicians’ visits, and miscellaneous medical services.
A rating system factor that reflects the relative hazard of an occupancy for pricing purposes and is expressed as a percentage of the base rate (ranges from 10 percent to 1,000 percent).
A fixed cost element of the retrospective rating formula that includes acquisition expenses, loss control services, premium audit, general administration of the insurance, an adjustment for limiting the retrospective premium to a stated maximum, and a provision for the insurer’s profits and contingencies.
One one-hundredth of one percent.
The risk that the amount the organization receives to offset its losses may be greater than or less than its actual losses.
A large aggregate retention spanning multiple types of risk exposure.
Intentional harmful or offensive physical contact with another person without legal justification.
A corporate share that is owned by the holder of the share certificate and is not registered; therefore, ownership remains private.
An internationally recognized classification of wind velocity that assigns names and numbers to eighteen categories of wind; also estimates the effects that winds will produce in each category.
The division of markets by purchase behavior.
The process of comparing results to industry standards or best practices.
Person(s) designated in a life insurance policy to receive the death benefit.
The state that governs workers compensation benefit payments and determines the subrogation laws that will apply in a specific case.
The most that an insurer would pay for a loss after considering all the facts. The claims representative determines the highest probable award (as from a trial or arbitration), then adds the costs of the action.
A measure of an asset’s volatility relative to that of the overall market for that type of asset.
The measure of how many times a particular node is part of the shortest path between two other nodes in a network.
A contract bond guaranteeing that a contractor bidding on a construction or supply contract will enter into the contract and will provide a performance bond if the bid is accepted.
The price a dealer is willing to pay for a security.
The difference between the lowest bid and the next lowest bid for a contract.
The difference between the bid price and the asked price of a security.
Sets of data that are too large to be gathered and analyzed by traditional methods.
A network that has two types of nodes.
A contract in which each party promises a performance.
A perception by both parties to a contract that does not agree with the facts.
A document acknowledging receipt of goods from the shipper, given by the carrier, which includes the terms of the contract of carriage for the goods.
Freight earned by common carriers.
A section in an audit report that summarizes an organization's classifications by state, rate changes, and exposure breaks used to extend the premium.
A measurement that indicates how the amount of billings, costs incurred, and recognized gross profit each relate to the estimated final amounts of the elements. This method is used to estimate profits on uncompleted contracts.
The amount of imbalance in the billing-cost-profit relationship that results in an overbilling.
A temporary written or oral agreement to provide insurance coverage until a formal written policy is issued.
Requires the parties to an arbitrated dispute to accept the arbitrator’s decision.
An insurance agent's authority to effect coverage on behalf of the insurer.
A method of placing insurance in which a surplus lines intermediary can bind coverage for a particular submission that falls within the parameters of the binding authority contract without prior submission to the surplus lines insurer.
A conditional receipt that provides coverage on the date of receipt until a specified time or until the insurer disapproves the application.
A process that views people at work as special kinds of machines functioning within environments filled with other machines.
The science that integrates physics and human anatomy; used to determine whether impact is severe enough to have caused an alleged injury.
Biological identification of an individual using anatomy or physiology.
A unit of a single binary value, either 0 or 1, in computer data.
An approach to determining eligible surplus lines insurers in which the state insurance regulator compiles a list of insurers that are determined to be ineligible for surplus lines insurance transactions.
Water that is filled with bacteria; sources include sewage, seawater, and water that has flowed over organic materials.
A signature or the equivalent of a signature on a negotiable instrument that names no specific payee, making the instrument payable to the bearer.
A rate that can be used for blanket coverage at multiple locations instead of using the highest rate applicable to any one location.
A basis for insuring all items within a single amount of insurance without specifically identifying each item.
A bond that guarantees the performance of all of a charterer’s flights and is filed with the Department of Transportation (DOT).
A rate that can be used for blanket coverage at multiple locations that uses the highest rate applicable to any one location.
Insurance that covers either of the following with one limit of insurance: (1) one type of property in one or more separately rated buildings or (2) two or more types of property in one or more separately rated buildings.
The maximum dollar amount the insurer will pay for two or more items or classes of property at one or more locations.
Represent billing that is charged on an hourly basis, but at a fixed hourly rate, whether a senior partner in the firm or the newest associate.
A common feature of online ADR in which parties make a series of offers and demands. Neither knows what the other is offering or demanding, but the parties are notified if their figures overlap. Some providers apply settlement formulas to establish a settlement amount from the offers and the demands.
A dealers policy, particularly one written for a jeweler or furrier.
A bank account that is used for authorized expenditures to care for a ward, such as food, childcare, health insurance, and education.
A short-range wireless connection, based on radio waves, that allows devices to communicate.
A vessel capable of full ocean operation.
An endorsement that insurers must attach to motor truck cargo liability policies of interstate carriers stating that the insurer will pay cargo claims for which the insured is liable, up to the limits required by the U.S. Department of Transportation, even if such claims are not covered under the policy.
Official recognition of a medical professional's additional training and demonstration of a higher level of competence.
A forum for appealing decisions of the contracting officer.
The controlling entity of a corporation, elected by stockholders.
An eight-member board, chaired by the Ethics Counsel, responsible for implementing, establishing, and approving CPCU ethics policy.
An insurance policy that covers the marine property and liability loss exposures of a boat dealer.
A policy used for insuring small pleasure boats.
An insurance policy that covers loss exposures arising out of the ownership, maintenance, or use of watercraft used principally for recreational or personal-transportation purposes.
A truck-tractor operating without a semitrailer.
Coverage for an owner-operator’s use of his or her truck while not under lease to a motor carrier (and therefore not covered under the motor carrier’s auto policy).
Operating a truck-tractor without a semitrailer.
Physical injury to a person, including sickness, disease, and death.
A fired pressure vessel constructed of cast iron or steel in which water is heated to produce steam or hot water.
The minimum qualification, under federal antidiscrimination laws, that an employee needs in order to be able to perform the duties of a particular job.
A long-term debt instrument that requires the issuer to pay a set annual rate of interest and to repay the borrowed sum on a specified date.
The amount by which a bond’s purchase price is lower than its par value.
A written agreement containing the terms and conditions of a bond’s lending agreement.
The maximum amount the surety is obligated to pay for under a surety bond.
The amount by which a bond’s purchase price is higher than its par value.
Agency costs arising from the creation of incentives for managers to act in the best interests of shareholders.
A diagnostic imaging procedure in which the examiner injects the patient with radioactive compounds, which adhere to bones and settle into troublesome areas, indicating where the bone is fractured or deteriorating.
Payroll given to an employee in addition to what is usual or strictly due from an employer.
A contract provision that provides an incentive payment for exemplary performance.
A group of policies with a common characteristic, such as territory or type of coverage, or all policies written by a particular insurer or agency.
An asset's historical cost minus accumulated depreciation.
An exclusion for losses to crane and derrick booms while being operated, unless the loss is directly caused by perils specified in the policy.
A learner who grew up with the space race, the civil rights movement, the Vietnam War, and Watergate. Boomers are experienced workers who work hard and are not afraid to question authority.
Tax rebates on exported goods and taxes on imported goods, used by a government to establish a “tax-neutral” setting for international trade and investment.
A report the primary insurer provides periodically to the reinsurer that contains a history of all loss exposures reinsured under the treaty.
A disorder characterized by a pervasive pattern of instability of self-image, mood, and interpersonal relations.
A method of estimating the IBNR reserve using expected losses and an IBNR factor.
A project in which money is received in one period and repaid in subsequent periods.
A form of early protection in which a loan financed a voyage for the ship owner; the loan commanded a high interest rate and was forgiven if misfortune befell the ship and it did not return.
A system that uses aggregate sales information from agency units, producers, and branch offices to create overall agency goals.
Earthquake-resistant construction, used in buildings under three stories tall, that integrates roof and floor diaphragms that can flex to transmit and distribute the forces an earthquake exerts on a structure.
Endorsement that permits the insured, when the insurer takes damaged merchandise as salvage, to stamp the word “salvage” on the merchandise or to remove its brands or labels before sale.
A privileged party’s release of private information beyond his or her scope of authority.
The failure, without legal excuse, to fulfill a contractual promise.
A voluntary failure to perform some promised act or obligation.
A basis for an injured crew member to sue the vessel owner and the vessel under General Maritime Law for damages.
Source of liability based on laws that protect consumers who purchase products that do not perform as expected.
The failure to meet the terms of a promise or an agreement associated with a product.
Goods, packed in individual boxes, drums, bags, cartons, barrels, or crates; not shipped in bulk; and not packed in shipping containers.
Coverage, in an EDP equipment floater, for perils such as mechanical failure, electrical disturbance, and damage to electronic data when covered equipment breaks down.
For capital budgeting purposes, a determination of the annual sales level at which the project generates enough profit to return the original capital invested plus the cost of capital.
A short piece of bracing that is inserted laterally between joists.
A court ruling explicitly requiring that all relevant factors be considered in determining actual cash value.
An ISO homeowners form covering the same causes of loss as the basic form, plus six additional causes of loss.
A contract provision that relieves an indemnitee from the consequences of negligence.
The endorsement that modifies the Garage Coverage Form to cover the named insured’s liability for property damage to the named insured’s products resulting from defects in those products, subject to a deductible.
The endorsement to the Garage Coverage Form that adds several liability coverage enhancements.
An independent producer who represents insurance customers.
A reinsurance marketing system in which a reinsurance intermediary brokers the reinsurance transaction between the primary insurer and reinsurer(s).
An approach to determining eligible surplus lines insurers in which the state establishes standards and brokers determine whether a particular insurer meets those standards.
Compensation in the form of a flat fee or a commission that is paid by the reinsurer to the reinsurance intermediary for services provided.
The relationship that exists when subsidiaries are owned by the same parent company.
An idle or abandoned property tainted by real or suspected environmental contamination.
A vessel whose navigation is limited to inland waterways, harbors, or coastal waters.
A short-term operating plan for an insurance organization that contains detailed premium, loss, expense, or other financial operating information grouped by company, product, profit center, or functional responsibility.
The basic tool used to plan the coordinating activities of all parties affected by a budget.
A level of excess insurance coverage between a primary layer and an umbrella policy.
A form that covers buildings in the course of construction, including additions or alterations to existing buildings.
Policy that covers a building in the course of construction, including building materials and supplies while on or away from the building site.
A classification of auto storage for dealerships; includes display rooms, service areas, and other enclosed areas of buildings that are locked when unattended.
As defined in the BPP, the building described in the policy; the building’s completed additions; fixtures, including outdoor fixtures; permanently installed machinery and equipment; and personal property owned by the insured that is used to maintain or service the building or its premises.
A commercial property coverage form that can be used to cover buildings, “your business personal property,” and personal property of others.
A rating classification based on the quality of a community's building codes and the level of their enforcement; ranges from 1 to 10.
Local ordinances or state statutes that regulate the construction of buildings within a municipality, county, or state.
Provides for an automatic annual percentage increase (as noted in the declarations) on buildings to act as an inflation guard.
The land adjacent to the incline or track system that is devoted to constructing or repairing vessels on the ways.
Exaggerating losses from a real accident and taking advantage of insurance benefits.
A roof composed of three to five alternate layers of tar and gravel (asphalt).
Reserves established for the settlement of an entire group of claims.
Reserves set aside for future expected claim payments but not associated with any specific claim; include a provision for incurred but not reported (IBNR) claims, future development of known claims (beyond the carried case reserves), and potential reopening of claims that have been settled.
Storage of loose granules, powder, or pellets in silos, bins, or tanks, or in piles on the floor.
An excess marine liability policy that operates in the same manner as an umbrella policy, providing not only excess limits but also drop-down coverage for some claims not covered by the underlying insurance.
In a trial, the duty of a party to prove that the facts it claims are true.
A statistical organization that collects data to provide insurance industry rates and other information for workers' compensation.
A safe designed to prevent burglary; it includes several classes based on construction specifications and vulnerability to burglary.
The taking of property from inside a building by someone who unlawfully enters or exits the building.
The act of breaking into or out of any closed building or space not open for business to commit another felony.
An examination to detect symptom magnification or fabrication of pain. The patient is asked to kneel on a chair and bend forward to touch the floor with the fingers. A patient who is unable to perform the test or who overbalances may be magnifying symptoms.
Defined by the ISO homeowners policy to be a trade, profession, or an occupation.
Considers continuity and a profit motive.
A purpose-of-use category referring to individually owned aircraft used for the owner’s personal purposes and for which no charge is made or direct profit derived from use of the aircraft.
A coverage form, filed by ISO, that covers liability arising out of the ownership, maintenance, or use of autos and physical damage to autos owned, leased, or hired by the named insured.
A process that identifies potential threats to an organization and provides a methodology for ensuring an organization's continued business operations.
A written document detailing the steps to take after a disaster to ensure an organization’s continued business operations.
The expansions and contractions in general business activity.
An accounting assumption that an organization’s financial records contain only data related to the organization and not data related to its owners.
Sum of (1) net profit or loss that would have been earned or incurred if the suspension had not occurred and (2) normal operating expenses, including payroll, that continue during the suspension.
Form that covers both business income and extra expense losses (even if the extra expenses do not reduce the business income loss).
Form that covers business income loss but covers extra expenses only to the extent that they reduce the business income loss.
Option that suspends the coinsurance clause as long as the insured carries an amount of business income insurance that is equal to the value agreed on by the policyholder and the insurer.
Insurance that covers the reduction in an organization's income when operations are interrupted by damage to property caused by a covered peril and extra expenses incurred to continue the insured's operations.
An endorsement that modifies business income coverage forms to make them more appropriate for covering the business income loss exposures of schools.
Insurance that covers the reduction in an organization’s income when operations are interrupted by damage to property caused by a covered peril.
Insurance that covers the reduction in an organization’s income when operations are interrupted by damage to property caused by a covered peril.
A financial loss that occurs when tangible commercial property is damaged or destroyed, resulting in a loss of revenue or increased expenses during the time that the property is being replaced or repaired.
An endorsement that bases the final policy premium earned by the insurer on the actual exposure as reported by the insured at twelve-month intervals.
A worksheet for calculating the amount of insurance necessary to comply with the Coinsurance condition of business income insurance forms, for reporting business income values to the insurer, or for providing underwriters with information they need to evaluate an organization’s business income loss exposure.
A worksheet used to estimate an organization’s annual business income in order to determine the amount of business interruption insurance needed in the event of a loss.
The skills, technologies, applications, and practices used to improve decision-making insights and reinforce information integrity.
The functional and organizational parameters used to evaluate how information requirements relate to job responsibilities.
The multidimensional slices of information that connect system users to performance scorecards and analytics for enterprise-wide decision making.
The enterprise information management technologies designed to plan and control the decision-making information flows that affect upside and downside risk analysis, and extract, transform, and load systems data into an integrated structure.
Loss of revenue that a business or another organization sustains because its operations are suspended as a result of physical injury to its property.
Coverage for the loss of revenue that a business or another organization sustains because its operations are suspended as a result of physical injury to its property.
An individual who has express or implied permission to be on the premises of another for the purpose of doing business.
A legal rule that provides that a director will not be personally liable for a decision involving business judgment, provided the director made an informed decision and acted in good faith.
The core aspects of an organization, including its vision, mission, strategies, infrastructure, policies, offerings, and processes.
Any activity that has one or more of the following characteristics: The insurer spreads or underwrites the policyholder’s risk, the insurer and the insured have a direct contractual agreement, and the activity is unique to entities within the insurance industry.
Documents kept in the ordinary course of a business with a regular practice of creating such records.
Stock, furniture, fixtures, equipment and machinery, tenant’s improvements and betterments, and other personal property owned by the insured.
Automatically increases the business personal property limit by 25 percent when actual values exceed the limit of insurance because of seasonal variations.
A plan that contains divisional managers’ decisions about the division’s goals and how the division will support the organization’s corporate goals.
A statement of long-term work that demonstrates an individual’s or organization’s professional management ability.
A systematic, iterative plan to analyze and improve business processes through life-cycle phases to achieve long-term goals and client satisfaction.
A building and its completed additions, permanently installed fixtures, machinery and equipment, outdoor fixtures and structures, and personal property owned and used to maintain or service the building or its premises.
Risk that is inherent in the operation of a particular organization, including the possibility of loss, no loss, or gain.
Torts that are a wrongful obstruction of the business rights of others.
Relates to vehicle usage.
A package policy that combines most of the property and liability coverages needed by small and medium-size businesses.
Covers risks of direct physical loss except losses subject to policy exclusions and limitations.
Includes covered causes of loss and related exclusions identical to those in the basic causes of loss form of the CPP with one additional cause of loss—transportation.
A contract under which owners of a business agree on behalf of their estates to sell, and a purchaser agrees to buy, their interest in a business at a specified or determinable price upon the occurrence of a stated event, such as the owner’s death, disability, or retirement.
A document promoters submit to a DOI indicating the powers assigned for insurer operations to officers, directors, and the insurer’s board of directors and officers collectively.
Communication where there is no understanding between the individuals communicating.

C

A separate tax-paying entity apart from its shareholders; it pays tax on its taxable income at corporate income tax rates, and its taxable income is its gross income subject to tax less deductions allowable to corporations.
See Cost and freight (C&F).
A hollow, cylindrical, or rectangular object, usually made of steel or concrete, used to prevent water or soft soil from entering an excavation or construction under water.
The loss must be able to be calculated.
A twelve-month period beginning January 1 and ending December 31.
Medical insurance deductible an insured must meet only once during the calendar year.
A method of collecting ratemaking data that estimates both earned premiums and incurred losses by formulas from accounting records.
An option to buy a set amount of the underlying security at any time within a specified period.
The amount that the buyer of a call option has to pay the seller for the right to purchase a stock or stock index at a specified price by a specified date.
The price at which a bond or preferred stock with a call provision can be redeemed by the issuer.
A debt instrument that gives the issuer the right to pay off the bond before maturity.
A bony material that hardens into permanent bone.
Form that covers the stock in trade (inventory) of camera dealers or musical instrument dealers and similar property of others in the insured’s care, custody, or control.
A legally enforceable contract that is no longer in effect.
Termination of a policy, by either the insurer or the insured, during the policy term.
A CPCU student whose matriculation application has been approved.
Broad aspirational goals of CPCU conduct.
The amount of business an insurer is able to write, usually based on a comparison of the insurer's written premiums to its policyholders' surplus.
Management, technical abilities, and strengths of the contractor's organization to perform all work undertaken.
A formal relationship between two or more sureties that is formed to handle large projects exceeding a single surety's bonding capacity.
A leverage ratio that indicates an insurer's financial strength by relating net written premiums to policyholders' surplus.
A legal qualification that determines one's ability to enter into an enforceable contract.
The accumulated assets of a business or an owner's equity in a business.
The amount by which an asset’s selling price exceeds its purchase price.
A method of pricing securities based on the relationship between risk and return.
The process of evaluating alternative capital investment proposals in terms of the cash outlays that the proposals require and the present values of the cash inflows that the proposals are likely to generate.
The planning and managing of a corporation’s long-term investments.
Disbursements for assets that will be consumed over a relatively long period, usually over multiple accounting periods.
Gain realized from the sale or exchange of capital assets.
Stockholders' gains from profits on their stock.
The amount by which the proceeds from the sale of a capital asset are less than the adjusted cost of acquiring it.
A financial market in which long-term securities are traded.
Financial needs that must be met with cash.
A financial account used by a governmental entity for resources to acquire or develop land or buildings.
The limitation of the amount of money a company can invest in a particular year.
A balance sheet value that represents the amount of funds that a corporation’s stockholders have contributed through the purchase of stock.
A corporation’s mix of long-term debt and equity.
The difference between a stock’s purchase price and its par value.
A payment structure under which an HMO prepays its medical providers a flat amount each period (typically monthly) based on the number of members, regardless of the number of patient visits or the cost of the treatments.
Set per-person and per-period payments made to participating medical providers regardless of actual incurred costs or services provided.
Arrangement in which the insurer agrees to pay an hourly rate for the work performed on the case, but a maximum amount limits the total cost for the case.
The information preceding related classifications in the Basic Manual that forms a part of all of the classification's definition.
An insurer that insureds own and control.
An insurer formed primarily to cover the loss exposures of its parent or members.
An insurance company formed primarily to cover the loss exposures of its owner(s) or members.
A subsidiary formed to insure the loss exposures of its parent company and the parent's affiliates.
A type of fire suppression system in which carbon dioxide is stored as a liquid under pressure and is discharged as a gas through the pipes of the system to the fire site.
The loss of benefits that one spouse is entitled to receive from the other, including companionship, affection, and sexual relations resulting from the injury or death of a spouse.
A plan developed by a manager and an employee that establishes a series of progressively ambitious organizational goals for that employee and the time allotted to achieve them.
Insurance that covers loss of or damage to property shipped primarily by water or, if in foreign trade, by air.
Insurance that covers loss of or damage to property while it is being shipped or stored during shipment.
Insurance that covers cargo against many of the perils excluded by the FC&S warranty, but only while the property is afloat (subject to minor exceptions).
A wrist condition characterized by numbness, weakness, or tingling that may be caused by repetitive hand motions.
A federal statute that governs a common carrier’s liability for goods shipped in foreign trade to or from the United States by sea.
A person or organization in the business of transporting property of others.
A concept that applies when a nonrecognition provision in the tax code defers capital gains. When a capital asset is sold or exchanged, the income tax basis from the asset sold is “carried over” from the property sold or exchanged to the new property acq
Developed by the claims representative with defense counsel and includes a discovery plan, a pretrial motion plan, and a trial plan. It can be adjusted as warranted as the case proceeds.
Laws that develop out of court decisions in particular cases and establish precedents for future cases.
An estimate of the total expected payment that will satisfy the surety's performance, payment, and bid bond obligations.
A medical professional who administers cases and typically has a background in nursing, social work, physical therapy, or occupational therapy.
A loss reserve assigned to an individual claim.
The reserves established by the claims department, third party adjusters, or independent adjusters for known and reported claims only; case reserves do not include future development on reported claims.
An asset classification that includes coins, currency, checks, bank drafts, money orders, and demand deposits in commercial banks.
A liquidity ratio that measures the intermediary's ability to pay premiums that are due to insurers.
A defined benefit plan that uses hypothetical participant accounts to look like a defined contribution plan.
An accounting basis under which transactions are recorded only as cash is received or paid.
A reinsurance treaty provision that permits the primary insurer to obtain payment from the reinsurer for certain losses without having to wait until the next payment period.
An accounting record that records all payments.
Cash inflow minus cash outflow.
The cash receipts coming in minus the cash payments going out over a set period of time.
The act of monitoring and estimating the movement of cash into and out of an organization.
An accounting statement that presents the sources and amounts of cash inflows and outflows over a time period.
An asset-liability adequacy exercise that projects cash flows and analyzes amounts and timing under various assumptions.
The process of matching an investment's maturity value with the amount of expected loss payments.
A process that recognizes income in the accounting period in which it is received and recognizes expenses in the accounting period in which they are paid.
The owner may decide to give up all insurance benefits and select a cash surrender option in return for the policy’s cash value.
The monetary amount, considered to be a form of savings, that accumulates in a permanent life insurance policy.
A test that limits cash value relative to the death benefit. If a contract satisfies this test, it may be considered a life insurance contract and be subject to generally favorable life insurance tax treatment.
An underwriting approach that relies considerably on investment income to offset underwriting losses.
A check drawn by a bank on its own funds.
A professional organization of actuaries.
A type of excess of loss reinsurance that covers losses arising out of the primary insurer's underlying casualty insurance policies.
A single event that causes widespread losses.
A type of insurance-linked security that is specifically designed to transfer insurable catastrophe risk to investors.
A layer of reinsurance that provides protection for the possible, but improbable, event that would involve many bonds.
A right to sell equity (stock) at a predetermined price in the event of a catastrophic loss.
A type of excess of loss reinsurance that protects the primary insurer from an accumulation of retained losses that arise from a single catastrophic event.
A reinsurance agreement that helps the primary insurer manage a large accumulation of losses from a single event, such as a hurricane or an earthquake.
A maximum amount that a policy will pay for all property losses associated with a single occurrence.
A type of computer program that estimates losses from future potential catastrophic events.
An agreement that gives the purchaser the right to a cash payment if a specified index of catastrophe losses reaches a specified level.
A forum in which primary insurers can trade insurance risk with other insurers.
A number assigned by ISO's Property Claim Services unit to a single event that causes more than $25 million in insured damage for the purpose of tracking and aggregating losses resulting from a catastrophe.
Insurance on a fishing vessel's "catch" (i.e., the fish that the vessel has caught), added by endorsement to the vessel's hull policy.
A private meeting with the mediator away from the opposing party.
The agents that directly result in one event causing another.
The relationship between two events, where the second is brought about by the first.
The mechanism or event that provided heat and fuel for a fire.
A plaintiff’s legal grounds to sue a defendant.
The actual means by which property is damaged or destroyed.
An analytical tool that uses fishbone diagrams to reveal root causes of problems.
A required component of the commercial property coverage part that specifies perils covered.
Form that covers fire, lightning, explosion, windstorm, hail, smoke, aircraft, vehicles, riot, civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action.
Form that covers basic form perils plus falling objects; weight of snow, ice, or sleet; water damage; and (as additional coverage) collapse caused by certain perils.
Form that covers “risks of direct physical loss,” subject to the form’s exclusions and limitations.
A ratio that measures an insurer's dependence on reinsurers and its loss exposure to the possibility that it might be unable to collect amounts due from reinsurers; the sum of reinsurance premiums ceded plus reinsurance recoverables minus funds held from
The monetary amount payable by a reinsurer to the primary insurer for its share of incurred losses.
Transferring a risk from a primary insurer to a reinsurer.
An amount paid by the reinsurer to the primary insurer to cover part or all of the primary insurer's policy acquisition expenses.
The insurer that transfers or cedes all or part of the insurance risk it has assumed to another insurer in a contractual arrangement.
A clearinghouse for financial information; analyzes the financial statements of motor carriers and provides the analysis to its client companies.
A type of alarm system that automatically transmits a signal to a location away from the protected premises that monitors the system at all times and keeps a record of all alarms.
A private detection service that monitors the systems of multiple businesses and/or residences and that calls appropriate authorities or dispatches its own personnel when an alarm is activated.
The single outcome that is the most representative of all possible outcomes included within a probability distribution.
A statistic that identifies the center or middle value of a probability distribution.
In a social network context, the quantification of a node’s relationship to other nodes in the same network.
The center of a cluster.
A certificate satisfying a DOI’s evidentiary requirement that a foreign insurer applicant is in compliance with its domiciliary jurisdiction’s regulations and that it is duly organized and authorized to transact insurance in its domiciliary state for the stated lines of business.
A type of commercial paper issued by a financial institution acknowledging receipt of money and promising to repay it, with interest, at a specific time.
A state-issued certificate that in some states signifies corporate existence.
A brief description of insurance coverage prepared by an insurer or its agent and commonly used by policyholders to provide evidence of insurance.
A document that specifies the commodities that a regulated motor carrier is permitted to transport, the territory of operation, and sometimes the routes of operation.
A terrorism incident within the United States (or outside the United States in the case of certain air carriers, vessels, or U.S. missions) that has caused losses in the U.S. exceeding $5 million to property-casualty insurers, that was violent or dangerous to human life, property, or infrastructure, and that was committed by someone acting on behalf of a foreign person or interest to coerce the civilian population or government of the United States.
A check guaranteed by a bank to be covered by sufficient funds on deposit.
A certified specialist who evaluates the orthotic needs of patients, formulates the development and fitting of orthoses, and maintains patients’ orthotic records.
A licensed professional who provides accounting services, including the financial statement, compilation, or review.
An unauthorized reinsurer that meets certain qualifications and is approved by the state insurance regulator of the ceding company’s state of domicile.
Seven vertebrae in the neck area, located at the top of the spinal column.
The transaction of transferring a risk from a primary insurer to a reinsurer.
An insurance policy that includes both commercial general liability (CGL) coverage and contractors pollution liability (CPL) coverage.
An insurance policy that includes both commercial general liability (CGL) coverage and environmental impairment liability (EIL) coverage.
A technique for estimating unpaid claims based on the assumption that aggregated losses will move from unpaid to paid in a pattern that is generally consistent over time; thus, historical loss-development patterns can be used to predict future loss-development patterns.
Data and information that sequentially connects the Four Levels methodology and shows the contribution learning has made to the business.
An analysis that projects the effects a given system change is likely to have on an existing system.
A systematic process used to analyze a single event, focusing on conditions or elements that changed and became causal factors.
A data collection tool that tracks performance over time and is useful when one performance variable has been spotted as a potential problem or when testing ideas for process improvement.
A measure of the growth in an insurer's underwriting loss exposure.
The written consent from the architect and owner that modifies the construction contract in price and substance.
A contract provision that enables an owner to make changes and modifications to the work.
A policy provision that states the procedure that must be followed to alter the policy and who has the authority to request an alteration.
A system whereby customers are provided access to an organization's products or services.
The integrity and commitment to meet obligations of a person or entity.
A defense that shields charitable organizations from liability.
A travel contract in which transportation is temporarily hired for a specific trip.
A fishing vessel typically carrying groups of six to ten passengers who pay the owner to charter the vessel for one-day fishing excursions.
Freight earned by shipowners that place their vessels on time or voyage charter.
The contract of carriage used for tramp shipping.
Insurance that covers a voyage or time charterer's liability loss exposures arising out of the clauses of the applicable charter party.
An insurance policy that covers a voyage or time charterer’s liabilities arising out of the charter party.
The arrangement by which a shipper leases a vessel to transport cargo for a specified period of time or for a particular voyage or series of voyages; although the vessel’s routing is determined by the shipper, the vessel remains under the operation of the ship-owner.
Tangible, movable personal property.
The individual tasked with ensuring the organization’s compliance with external requirements such as laws and regulations as well as compliance with internal policies and procedures.
The corporate officer to whom all other officers are subordinate.
The corporate officer responsible for the day-to-day running of a corporation.
A senior risk professional who has oversight over an organization’s enterprise risk management function.
A statistical test on the frequency distribution of events found in a sample compared to a particular theoretical distribution.
In a no-fault system, a plan that gives the insured the option, at the time an auto insurance policy is purchased or renewed, of choosing whether to be covered on a no-fault basis.
A criminal enterprise that strips stolen cars down to component pieces, which are then sold as spare parts.
Term describing a condition that has a long duration, recurs frequently, and changes little.
In the insurance industry, an inducement based on misrepresentation or deception to replace existing policies or to generate unwarranted commissions.
Selling terms under which the seller's price includes the cost of insurance and freight charges until the goods reach the foreign port of importation and in which the seller's responsibility for loss or damage to the goods is the same as under Cost and Freight (C&F) terms.
An electrical service panel that distributes electricity into several branches and acts as a safety device if an overload occurs.
A bulletin issued by the National Council on Compensation Insurance (NCCI) and state rating bureaus providing information regarding changes, pending law amendments, changes in procedures, or changes of classification codes.
An additional coverage in a business income form, covering loss of business income and/or extra expenses that result when access to the insured’s premises is prohibited by a civil authority because of damage by a covered cause of loss to property other than the insured’s.
A classification of law that applies to legal matters not governed by criminal law and that protects rights and provides remedies for breaches of duties owed to others.
A basic legal system that relies on scholarly interpretations of codes and constitutions rather than court interpretations of prior court decisions, as in common-law systems.
The type of liability imposed when an individual or entity is held legally liable for interfering with the rights of another individual, a family, or an organization.
Rules by which courts conduct civil trials. Civil trials concern the judicial resolution of claims by one individual or group against another.
A wrong against a person or persons, for which remedies include damages awarded to the victim and court-ordered injunctions to prevent further injury.
A federal statute that provides for the compensation of injured civilian employees of the armed forces working at air, naval, and military bases.
A demand by a person or business seeking to recover from an insurer for a loss that may be covered by an insurance policy.
The insurer function that handles demands for claim payments.
A process to efficiently manage the timely payment of claims and to restore losses, whether suffered by the organization or by others to whom the organization is legally responsible.
A department in an insurance company whose primary function is to investigate and satisfy the obligations of the insurer to the policyholder.
A periodic report of an organization’s claim payments and receipts.
A party that makes a claim and that can be either a first-party claimant or a third-party claimant.
A reinsurance treaty clause that states the circumstances under which the primary insurer must report and the reinsurer must pay a liability claim, and how loss adjustment expense will be handled.
A review of claim files to examine the technical details of claim settlements; ensure that claims procedures are followed; and verify that appropriate, thorough documentation is included.
A paper or an electronic file that contains information for a loss.
A set of guidelines and instructions that specify how certain claims handling tasks should be performed by setting policies and procedures for claim handling.
The insurer function that processes demands for claim payments.
A person responsible for investigating, evaluating, and settling claims.
The calculation of loss costs by adding the actual payments to changes in reserves for claims made during the accounting period.
Coverage that is triggered by a claim alleging bodily injury or property damage that is made during the policy period, even if the claim arises from an event that happened before policy inception.
A coverage form that provides coverage for bodily injury or property damage that is claimed during the policy period.
The event that triggers coverage under a claims-made coverage form; the first making of a claim against any insured during either the policy period or an extended reporting period.
A liability insurance policy in which a claim is made during the policy period or any extended reporting period.
The calculation of loss costs using the amount paid on losses during the accounting period, regardless of when they were incurred.
A type of per occurrence excess of loss reinsurance for liability loss exposures that protects the primary insurer against aggregations of losses from one occurrence that affects several insureds or several types of insurance.
Losses from a single occurrence that involves more than one bond.
The ratio of noninvestment grade bonds to policyholders' surplus.
A lawsuit in which one person or a small group of people represent the interests of an entire class of people in litigation.
A numeric code representing the description in the rating classification table that best fits a particular organization’s operations.
The value of the target variable in a model.
An estimate of the probability that an instance will fall into its predicted class.
A type of insurance rate that applies to all insureds in the same rating category or rating class.
A rating approach that uses rates reflecting the average probability of loss for businesses within large groups of similar risks; the predominant method used for rating commercial properties.
A number by which a base rate may be multiplied to distinguish among the expected losses of accounts categorized in classification plans.
A grouping of similar loss exposures into homogeneous classes for rating purposes.
A supervised learning technique to segment data according to the values of known attributes to determine the value of a categorical target variable.
A technique to segment data according to its characteristics.
A reference published by the NCCI providing two arrangements of workers' compensation classification codes in one manual.
A description within the Classification Section of the Basic Manual for Workers Compensation and Employers Liability Insurance (Basic Manual) that indicates how the classification applies.
Guides developed by PAAS that provide detailed descriptions of workers' compensation and general liability classifications to assist premium auditors in assigning proper classification codes.
A system developed for rating purposes to group similar loss exposures into homogeneous classes to avoid adverse selection.
A table that provides the necessary rating and classification information for general liability, fire, crime/fidelity, and package policy classification in the CLM.
A supervised learning technique that uses a structure similar to a tree to segment data according to known attributes to determine the value of a categorical target variable.
An express warranty in a hull policy that the assured will operate its insured vessels during the policy period in accordance with any requirements or restrictions imposed by the assured's classification society.
The description within the Classification Section of the Basic Manual that includes the businesses and activities within a classification.
An alphabetical listing of the workers compensation classifications found in the Basic Manual for Workers Compensation and Employers Liability Insurance (Basic Manual).
A way to provide learners with a safe and comfortable environment in which to learn.
Water that comes from pipes, sinks, or bathtubs, or that leaks through a broken window or roof.
A method of protection to reduce fire exposure in which an open area gives the fire service room to operate.
Enough distance in between vehicles traveling the same direction so that the driver of the following vehicle has time to stop in an emergency without running into the leading vehicle.
The delay between when a check is deposited and when it has cleared.
Employees defined in the Basic Manual as having clerical office duties within a clerical office.
According to the Basic Manual, a workplace for clerical employees; a work area physically separated from an employer's workplace hazards.
According to the Basic Manual, include "creation or maintenance of employer records, correspondence, computer programs, files drafting, telephone duties, including telephone sales, data entry or word processing, copy or fax machine operations, unless the insured is in the business of making copies or faxing for the public, and general office work similar in nature to the above."
An employee of a contractor who has sole responsibility for the daily supervision of each project component to ensure that materials, methodology, and quality of workmanship meet engineering specifications.
The endorsement that modifies employee theft coverage to cover theft by the insured’s employee(s) of money, securities, or other property that is owned, leased, or held by a client of the insured.
An addictive condition that occurs when a person consumes increasing amounts of a substance over a longer period of time than he or she intended.
A type of private fire detection system in which watch service personnel make regular rounds of a closed premises and record visits to each station along the route by inserting a special key in a clock or by using magnetic key cards.
A corporation in which one person or a small group of people, frequently family members, own the stock and do not trade it in markets maintained by securities dealers or brokers.
A process in which only specific intermediaries who meet certain qualifications are invited to submit bids.
A fracture in which the skin has not been punctured by the bone.
A type of investment fund that has a fixed number of shares not redeemable by the mutual fund but salable to outside parties.
The measure of the average distance, or path length, between a particular node and the other nodes in a network.
When the objective of the sales call has been met.
An agreement that provides instructions for establishing an exemption from the Section 4371 excise tax on insurance premiums paid to a foreign insurer or reinsurer when the exemption is based on the provisions of an income tax treaty to which the United States is a party.
A tool used for monitoring a claim representative's effectiveness. Equals the number of claims closed divided by the number of new claims assigned during the same time interval, usually a month.
The situation in which parties have resolved their differences but do not yet have a formally expressed agreement.
A description of the corrective cleanup and reclamation that is needed to remove or decontaminate hazardous waste after a waste facility closes.
Information, technology, and storage services contractually provided from remote locations, through the internet or another network, without a direct server connection.
An association of persons who meet or live together for a social purpose or some other common aim, such as the pursuit of literature, science, or politics; acts as an unincorporated association.
A model that determines previously unknown groupings of data.
A structure, formed by the fusion of four or five small vertebrae, located at the lower end of the spinal column and below the sacrum. Alternatively referred to as the tailbone.
A shipping condition under which the buyer pays when the goods are delivered and has no right to inspect the goods as a condition to acceptance and payment.
The minimum standards of expected behavior for those to whom the code applies.
The representation of a character in computer terminology.
Representations of blank spaces on a page of text, such as spaces after words or sentences.
The representation of a character in computer terminology.
A statistic that represents the degree of relationship between two variables.
A statistic used to determine how well a regression model fits the data.
A measure of dispersion calculated by dividing a distribution's standard deviation by its mean.
A temporary watertight enclosure that is pumped dry to expose the bed of a body of water.
One of the long-term care coverage triggers, generally taken to mean the deterioration in or loss of intellectual capacity of the insured that can be measured by clinical evidence and standardized tests.
An insurance-to-value provision in many property insurance policies providing that if the property is underinsured, the amount that an insurer will pay for a covered loss is reduced.
Medical insurance provision that requires the insured to pay part of the covered medical expenses in excess of the deductible.
The sum of the insured’s estimated net income and operating expenses for the twelve months following policy inception, minus only those expenses listed in the business income worksheet.
A clause that requires the insured to carry insurance equal to at least a specified percentage of the insured property's value.
A condition that requires the insured to carry insurance equal to at least a specified percentage of the actual cash value (ACV) of the property insured.
A provision in an excess of loss reinsurance agreement requiring the primary insurer to participate in losses that exceed its retention.
Contacting a prospect without an appointment.
Contacting a prospect without an appointment.
A loss control technique for computer security in which a properly wired, alarmed, empty room is available where substitute leased hardware can be quickly installed.
An abrupt falling down or caving in of a building with the result that the building or any part of the building cannot be occupied for its intended use.
The sudden falling of a natural or artificial structure in response to the force of gravity.
Cash, or near cash assets, that a principal pledges to secure credit, a loan, or other obligation.
A document that provides the conditions for posting and eventually returning collateral to the principal.
The issuing of a demand by the holder of the collateral, usually to a financial institution, to release some or all of the collateral.
A doctrine that bars parties from relitigating an issue on which a court has already ruled, even if the second lawsuit differs significantly from the first.
A legal doctrine that provides that the damages owed to a victim should not be reduced because the victim is entitled to recover money from other sources, such as an insurance policy.
Nonliability insurance sources of recovery that reimburse claimants for all or some of their medical expenses, wage loss, or disability. Examples include healthcare insurance, no-fault auto insurance, and workers compensation.
Freight that is not earned by the shipowner unless the shipper's goods are delivered to their destination "in specie"-i.e., having some value upon arrival as goods of the kind to which they belonged when they were shipped.
The delay between when a payment is made and when the cash is actually credited to the payee’s account.
A process by which employees, represented collectively by a union, negotiate (bargain) with the employer on a labor contract dealing with wages, hours, and working conditions.
A transverse fracture of the distal end of the radius with displacement of the hand backward and outward.
Damage to a motor vehicle caused by its impact with another vehicle or object, or by the vehicle’s overturn.
As defined in the PAP, the upset of a covered auto or a non-owned auto or its impact with another vehicle or object.
A generic term for technology systems that reduce the frequency and severity of auto accidents caused by drivers’ negligence or inattention.
Coverage for direct and accidental loss or damage to a covered auto caused by collision with another object or by overturn.
Clause that covers the insured’s liability for collision damage to other ships and their cargoes.
An agreement by two or more people to defraud another.
An excess liability insurance policy that combines the following-form and self-contained approaches by incorporating the provisions of the underlying policy and then modifying those provisions with additional conditions or exclusions in the excess policy.
A representation of a data attribute in a classification tree.
A policy that incorporates different types of insurance in a single policy.
A policy that enables a financial institution to cover loss of or damage to its customers’ property in the insured’s safe-depository facilities and damage to the insured’s premises.
A profitability ratio that indicates whether an insurer has made an underwriting loss or gain.
The combination of two functions to form a new function.
The ability of something to ignite and burn; a major determinant of the overall fire hazard.
A combustibility classification for occupancies with merchandise or materials of moderate combustibility.
A type of violent gas expansion that occurs when a flammable cloud (consisting of dust, vapor, or mist) reaches an ignition source.
The courtesy by which one country recognizes, within its own territory or in its courts, another country’s institutions.
A reinsurance treaty clause that states the treaty's duration and the circumstances that would trigger the treaty's termination.
The provision of the U.S. Constitution that gives Congress the power to regulate commerce (trade) with foreign nations and among the states (interstate commerce).
Form that covers photographic equipment and musical instruments used commercially by photographers, motion picture producers, professional musicians, and others.
A classification appearing in the Commercial Lines Manual (CLM) that is applied to any insured that owns five or more self-propelled vehicles. A reduced premium is charged on policies with this classification.
Insurance that covers a business or a not-for-profit organization against loss exposures arising out of the ownership, maintenance, or use of automobiles.
The temporary possession by one party (the bailee) of personal property of another party (the bailor) for a specific purpose beneficial to both parties.
Insurance that covers (1) money and securities against numerous perils (not limited to crime perils) and (2) property other than money and securities against crime perils, such as employee theft, robbery, theft by outsiders, and extortion.
A driver's license required for all operators of Commercial Motor Vehicles.
A system that indicates the degree of hazard that an occupancy presents in a particular classification.
Insurance that covers many of the common liability loss exposures faced by an organization, including its premises, operations, and products.
An insurance policy that covers many of the common liability loss exposures faced by an organization, including its premises, operations, and products.
A coverage form commonly used for insuring an organization’s premises and operations liability loss exposures and products and completed operations liability loss exposures.
Insurance that covers for-profit businesses or not-for-profit organizations against the adverse financial effects of property and liability losses.
The enactment of state laws that remove filing and approval requirements formerly applied to rates, rules, and forms for large commercial accounts, except for workers compensation rates, rules, and forms.
An ISO publication that includes rules and rating procedures for several major lines of commercial insurance.
New version of the MOP
Policy that covers two or more lines of business by combining ISO’s commercial lines coverage parts.
An unsecured short-term promissory note issued by a company to raise short-term cash, often to finance working capital requirements.
A short-term debt instrument traded in money markets and issued by a financially secure organization.
A required component of the commercial property coverage part that contains conditions applicable to all commercial property coverage forms.
A commercial property coverage part component that can be any of several commercial property forms containing an insuring agreement and related provisions.
Commercial package policy (CPP) coverage component that provides a broad range of coverages to “middle-market” or larger firms to insure buildings and business personal property.
A required commercial property coverage part component that provides basic information about the policyholder and the insurance provided.
A policy that is generally designed to cover property that is mobile but might cover fixed property such as electronic data processing equipment.
Insurance that covers commercial buildings and their contents against various types of property loss.
A code that provides rating information reflecting the degree of hazard that an occupancy presents in a particular classification.
Bonds that guarantee the performance of all obligations that do not arise from contracts.
A commercial auto use classification that applies to vehicles that do not fall into service or retail use classifications.
An aircraft purpose-of-use category referring to charter operators, air taxi operators, and other profit-seeking operators that transport persons and cargo for hire, undertake high-altitude photography, or conduct similar operations not requiring a special waiver from the Federal Aviation Administration; also includes rental of aircraft to pilots and flight instruction.
A percentage of the premium that the insurer pays to the agency or producer for new policies sold or existing policies renewed.
Statutory reserve for annuities that is equal to the greatest net present value of future guaranteed benefits.
The excess, if any, of the present value at the valuation date of future guaranteed benefits over the present value of any future modified net premiums.
A contract either to make or to accept delivery of a specified quantity of a commodity on a given date.
The risk associated with a change in the prices of commodities that are necessary to an organization’s operations.
Airlines, railroads, or trucking companies that furnish transportation to any member of the public seeking their offered services.
An analysis of root cause analyses for a given period to identify themes and trends in an organization's operations that should be addressed strategically.
Common causes of variation are inherent in a process and produce variations with predictable limits.
Areas of a condominium that are jointly owned by all unit owners, including the land on which the buildings are located.
Hazards existing in almost every class of business occupancy, usually referring specifically to (1) housekeeping, (2) heating equipment, (3) electrical equipment, and (4) smoking.
Laws that develop out of court decisions in particular cases and establish precedents for future cases.
A bond that bases coverage on customary practices rather than laws.
The European Union’s member countries’ single, unified market in which goods, services, people, and capital can move freely across borders.
A law that permits service of process on a partnership by serving any one of the partners.
A required CPP component that contains six conditions applicable to all coverage parts unless a coverage part states otherwise.
A required CPP component that provides basic information about the insurer, the policyholder, and the insurance provided.
An ownership interest in a corporation that gives stockowners certain rights and privileges, such as the right to vote on important corporate matters and to receive dividends.
A legal system in which the body of law is derived more from court decisions as opposed to statutes or constitutions.
The common-size balance sheet divides all balance sheet numbers by total assets.
The common-size income statement divides all income statement numbers by total revenue.
A financial statement in which amounts are reported as a percentage of a base figure.
An illness that can be transmitted from one person to another.
Property owned or acquired by both spouses during a marriage by their communal efforts. Each spouse has an undivided one-half interest in the community property.
An agreement that specifies how to value, settle, and discharge all obligations between parties to a reinsurance agreement.
An agreement that specifies how to value, settle, and discharge all obligations between parties to a reinsurance agreement.
A reinsurance treaty clause that allows the primary insurer and reinsurer to close out liability for claims under the treaty after a stated time period from treaty expiration.
Risk that affects a specific company or a small group of companies.
The trade advantage that a country has when it gains from trading with other countries, even when it is more efficient in production of all the traded goods and services.
A statement of an entity’s financial position that provides figures for the current and the prior year side by side to enable the reader to observe variations that might indicate financial deterioration or growth.
A financial analysis tool that provides figures for the current and the prior year side by side to enable the report user to observe variations that might indicate financial deterioration or growth.
A common-law principle that requires both parties to a loss to share the financial burden of the bodily injury or property damage according to their respective degrees of fault.
A common law principle that requires both parties to a loss to share the financial burden of the bodily injury or property damage according to their respective degrees of fault.
The qualification of a benefit for payment under workers compensation statutes.
The average amount of funds that must be retained in a bank account as indirect payment of bank service fees.
For purposes of IRA eligibility, compensation means wages, salary, professional fees, and other income received for services actually performed.
A board committee that determines compensation arrangements for the CEO and other senior managers.
A payment awarded by a court to reimburse a victim for actual harm.
A quality of evidence that suggests the source is reliable and the evidence is adequate to justify admission in court.
Relates to the reliability of the source of the evidence and whether it is adequate to justify admission in court.
A party to a contract who has the basic or minimal ability to do something and the mental ability to understand problems and make decisions.
The ability of one company to gain market share over its competitors by providing either lower prices or more unique products or services than those of its competitors.
Comparing one organization’s procedures, processes, and products with those of a direct competitor.
A state fund that sells workers compensation insurance in competition with private insurers.
An advertising budgeting method with which an organization assesses the competitive environment and uses the amounts spent by its major competitors as benchmarks.
A state fund that sells workers compensation insurance in competition with private insurers.
A formal plan for achieving a favorable competitive position in an industry.
A level of service in which the accountant simply compiles and reports a company’s financial statement data without rendering an opinion on the content.
An unaudited financial statement based on management-provided information.
The allegations made by a plaintiff in a lawsuit.
The initial document of pleading that is filed with the appropriate court to initiate a lawsuit and that specifies the grounds or allegations on which relief can be granted.
A lawsuit filed by the surety that claims that the total amount of the claims against the payment bond exceeds the penal sum of the payment bond.
A data collection tool that consists of a prioritized list of customer complaints.
An accounting method that delays recognizing income and expenses on contracts until the year the contract is completed.
The exposure to liability for bodily injury or property damage arising out of the insured's completed work.
The exposure to liability for bodily injury or property damage arising out of the insured’s completed work.
Coverage that insures liability for bodily injury or property damage arising out of the named insured’s completed work, excluding damage to the work itself.
The exposure to liability for bodily injury or property damage arising out of the insured's completed work.
The exposure to liability for bodily injury or property damage arising out of the insured's completed work.
A form that covers the completed value of the building or structure. The premium charged is reduced because the value of the policy exceeds the value at risk to the insurer until the building is completed.
An accounting process that recognizes total income and total expenses for the accounting period in which the contract is completed.
A bond that guarantees completion of a contract regardless of the owner's obligations or risks.
A claim that contains one or more characteristics that cause it to cost more than the average claim.
The process of documenting an organization’s adherence to external legal and regulatory requirements as well as to internal policies and standards.
A procedure to identify and analyze existing and potential compliance problems.
A classification of bonds that guarantee the principal will obey the laws applying to the activity for which the principal is licensed and pay damages to any third party suffering a loss because of the principal's failure to comply.
A classification of bonds that guarantee that the principal will comply with the applicable laws for the business or activity. Alternatively referred to as "compliance bonds only."
A bid that is higher than the expected competitive bids. The contractor makes a complimentary bid to appear responsive to a particular project owner's bid request.
A schedule, attached to an aircraft policy, that limits the insured’s recovery for each specified part of the aircraft to a stipulated percentage of the aircraft’s total insured value.
An optional insurance pricing approach that uses a premium base other than the one specified in the rating manual to price an entire account.
The return earned on reinvested investment income in addition to the return earned on the principal.
Interest earned on the original amount invested plus previously earned interest.
Coverage for direct and accidental loss or damage to a covered auto by any peril except collision or overturn or a peril specifically excluded.
Legislation that regulates the cleanup of hazardous waste sites. Alternatively referred to as Superfund.
A market conduct examination of all an insurer’s market conduct operations.
Individuals (who are generalists) who work with a client to help set personal objectives and to coordinate the development, implementation, and monitoring of a financial plan.
An ISO homeowners form covering the dwelling, other structures, personal property, and loss of use on an open perils basis.
A measure of income that goes beyond that reported on the income statement by including items such as unrealized gains and losses.
A network of sites (each known as a mirror) storing identical up-to-date versions of codes and documentation from R.
The statutory right of a party to require another party to submit a dispute to arbitration even though the other party has never agreed to such arbitration and prefers a court settlement.
Law that requires the owners or operators of automobiles to carry automobile liability insurance at least equal to certain minimum limits before the vehicle can be licensed or registered.
A bond that a defendant files because he or she is involuntarily placed in a defensive position by the plaintiff when litigation begins.
A criminal act using a computer to gain authorized or unauthorized access to steal, interrupt, or misuse computer system information.
Loss resulting directly from the use of a computer to fraudulently cause a transfer of that property from the “premises” or “banking premises” to a person or place outside the “premises.”
Coverage for loss of covered property due to use of a computer to fraudulently transfer covered property to the wrongdoer.
The commercial crime insuring agreement that covers money, securities, and other property against loss resulting from the use of a computer to fraudulently cause a transfer of covered property from inside the premises or a banking premises to a person or place anywhere else in the world.
The deliberate and hostile destruction of hardware or software or the disruption of productive processes.
A software program that is capable of reproducing itself and causing harm to other programs and files.
A technology that simulates human vision.
A diagnostic imaging tool that takes a series of x-rays at various angles and converts resulting images into digital codes that a computer interprets and reproduces on a video screen. Used to diagnose problems of the brain and spine.
An intentional failure to disclose a material fact.
A target marketing strategy by which marketers target a segment of a total market with the intent to capture a large or concentrated share of that segment.
A central account into which funds collected from all sources are transferred.
An organizational structure that places leadership at the center and works outward to customers.
A phase in the life of a system when the basic purpose and preliminary design of the system are formulated.
An expanded liability concept that applies when all defendants acted together or cooperatively.
A temporary mold to support the shape of concrete while it sets and cures.
A production platform that is supported above the water by a number of concrete cylindrical or rectangular cells that rest on the seabed, providing stability through their great weight.
A legal doctrine stating that if a loss can be attributed to two or more independent concurrent causes—one or more excluded by the policy and one covered—then the policy covers the loss.
One of multiple causes of loss, all leading to a single loss.
A direct intervention technique for monitoring the appropriateness of inpatient services and the length of a hospital stay and for determining whether a doctor’s orders are being followed.
A legal procedure by which a government body seeks a court’s permission to seize private property by eminent domain.
Any provision in an insurance policy that qualifies an otherwise enforceable promise of the insurer.
A document that establishes the current condition of the hull machinery and equipment and establishes a current market value and a replacement value.
An event that must occur at the same time as another condition in a contract.
An event that must occur before a duty of performance arises in a contract.
An event that, if it occurs, discharges a duty of performance in a contract.
An agreement to provide temporary coverage while an insurance application is being evaluated, but only if the application is or would have been approved.
A contract that one or more parties must perform only under certain conditions.
The likelihood that an event will occur if it is certain that another event has occurred or will occur in a given period.
A premium receipt used by life insurers and accident and health insurers that is not intended to provide immediate coverage but that may provide coverage back to the date of receipt under certain conditions.
A model to determine the likelihood of a loss given that the loss is greater than or equal to the VaR.
A real estate development consisting of a group of units, in which the air space within the boundaries of each unit is owned by the unit owner, and all remaining real and personal property is owned jointly by all the unit owners.
An entity composed of the unit owners in a condominium to manage the condominium and to own the common elements.
A document that describes what each condominium unit owner has purchased and clarifies the rights and responsibilities of the unit owners and the association.
Form that covers buildings and business personal property of condominium associations.
Form that covers business personal property and building property exposures of commercial (nonresidential) condominium units.
Housing unit in a complex owned by a corporation, the stockholders of which are the building's residents; the corporation owns the real estate title; each unit owner owns corporation stock and has the right to occupy a specific unit.
The portion of a condominium owned solely by a unit owner.
The transfer of heat from one mass to another by physical contact.
A person's motion or posture suggesting amicability and nondefensiveness.
The range of values within which the future mean is expected to fall.
The primary insurer's acceptance of the facultative reinsurer's authorization.
A situation that occurs when a decision maker's personal interests interfere to the extent that he or she makes decisions that adversely affect customers or employers.
A body of law that resolves questions when states’ laws conflict.
In property law, the intermingling of goods belonging to different owners.
A matrix that shows the predicted and actual results of a model.
A combination of two companies involved in unrelated lines of business.
A wireless communications system that allows vehicles to communicate interactively to relay safety information and thus reduce crashes.
For workers compensation purposes, a worker’s voluntary acceptance of the terms of employment and the worker’s competency to enter into such an agreement.
An agreement that, if the contractor is low bidder and is awarded the contract, the surety will issue the final bonds.
An insurance policy provision, usually found only in professional liability policies, that requires the insurer to obtain consent from the insured before settling a claim.
An indirect injury to an employee's family member caused solely by the employee's injury.
A payment awarded by a court to indemnify an injured party for losses that result indirectly from a wrong such as a breach of contract or a tort.
See Material evidence.
Damage to property that did not result from direct action of a covered cause of loss.
An accounting rule that requires transactions to be recorded in a manner such that net assets and net income are not overstated.
Something of value or bargained for and exchanged by the parties to a contract.
The person or organization that receives property being transported by a carrier.
A person or a business holding property owned by someone else for the purpose of selling it.
A credit arrangement in which one party entrusts merchandise to another party that acts as the consignor's agent in selling the goods to others.
The party who is shipping goods.
The party who entrusts merchandise to a consignee.
An accounting rule that requires an organization to use the same accounting principles and reporting practices in every accounting period.
A combination of two or more business entities into a new entity.
An expanded liability concept that applies when two or more parties worked together to commit an unlawful act.
The Constitution itself and all the decisions of the Supreme Court that involve the Constitution.
A form of government with a parliament, or a democratic legislative body, but with a monarch as a formal or ceremonial head of state.
The type of materials and design used to fabricate a building, which underwriters analyze when evaluating submissions for property insurance.
A federal law that revised the Miller Act to require a 100 percent payment bond on federal public works of $100,000 or more.
A building method that enables the general contractor to serve as the owner's agent for a building project.
A loan that provides financing during the construction period.
The endorsement that modifies the OCP coverage form to insure not only a project owner but also a designated contractor, architect, engineer, surveyor, or construction manager.
A situation created by an employer, through the conduct of a manager, a supervisor, or another employee that is so intolerable that an employee has no alternative but to resign.
Actions or inactions of a landlord that create conditions that prevent the tenant from enjoying a substantial or integral part of the premises.
Knowledge that a person is assumed by law to have because that knowledge could be gained by reasonable observation or inspection.
A loss that occurs when the cost to repair damaged property plus its remaining salvage value equals or exceeds the property's pre-loss value.
Long-term, complex sales made to consumers using the seller’s guidance based on the particular industry and available products and services to best meet the consumer’s needs.
A medical doctor with a specialty different from the specialty of the attending physician, who is asked by the family physician to advise or treat the patient on a limited basis.
An applicant for credit or insurance.
A federal law that applies to all loans or credit transactions.
A consumer reporting agency's communication that is often used to establish the consumer's eligibility for credit or insurance, employment, or other specific purposes.
A healthcare benefit plan that combines high-deductible health coverage with a health savings account or health reimbursement arrangement, with resultant lower premiums.
Selling additional insurance to meet agency standards by telephone or mail contact with the client.
Personal property that is usually contained in a building or other structure.
A period during which an insurer can challenge the validity of a life insurance policy.
The environment in which an organization seeks to achieve its goals.
A provision in an insurance rate for losses that could not be anticipated in the loss data.
A policy to protect the U.S. exporter/importer from financial losses caused by the inadequacy of the foreign importer/exporter’s insurance
Coverage, usually added to cargo policies by endorsement, that protects the assured/seller against cargo loss that occurs after title to the goods has passed to the buyer but before the goods are delivered to the buyer, who refuses to accept or pay for the damaged goods.
A prescribed set of sequential actions to be implemented in response to a significant threat or future event if it occurs.
Coverage for business income and extra expense loss due to equipment breakdown occurring at a location, shown in the Declarations, that the insured does not own or operate.
An agreement, entered into before any losses occur, that enables an organization to raise cash by selling stock or issuing debt at prearranged terms after a loss occurs that exceeds a certain threshold.
A commission that an insurer pays, usually annually, to an independent agency that is based on the premium volume and profitability level of the agency's business with that insurer.
A contract provision in which an insurer agrees to make supplemental payments to producers based on profitability alone or on a combination of profitability, volume, and growth in the agency’s book of business placed with that insurer.
A liability that may occur if a future and uncertain event occurs.
A net income loss that is caused by events that occur outside the organization.
A loss exposure for which the interruption of the organization's operations is conditional on another organization's ability to fulfill its duties.
A rate modification, issued by the NCCI based on data available at the time a policy is issued that allows an insurer to use a modification on the policy that should more closely approximate what the final modification will be.
Surplus notes that have been designed so that an insurer, at its option, can immediately obtain funds by issuing the notes at a pre-agreed rate of interest.
A legal document that extends a renewable term bond when attached.
Expenses that continue to be incurred during a business interruption.
Can result from a failure to remove a hazardous condition the defendant created by continuing invasions; for example, the seepage of contaminated water onto the claimant’s property.
A policy provision in which the assured guarantees or negates the existence of a fact or state of facts at policy inception or promises that something will be done, or will not be done, during the policy period.
An evaluation of whether a business operation has continued when a successor corporation continues essentially the same business or manufacturing operation as its predecessor. Liability may be imposed on successor corporations that would otherwise be insured.
A statement that describes who will own and manage the company when key individuals are no longer involved, or involved to a lesser degree, in the firm's operations as a result of death, disability, or retirement.
A basic GAAP principle that assumes that a business is a going concern, meaning that the business should be viewed as though its operations will be long-term and that ownership interests can be transferred without liquidating the business.
The process of constant evaluation and improvement to increase efficiency, effectiveness, and flexibility.
A reinsurance treaty that remains in effect until canceled by one of the parties to the treaty.
Data that is without breaks, having an infinite number of possible values, in a selected range.
The organizational condition achieved through (1) customer orientation, (2) process improvement, and (3) employee involvement.
A bond that remains in force until canceled by the surety. Alternatively referred to as a continuous bond.
A masonry wall resting on footings that run all the way around the perimeter of a house.
A legally enforceable agreement between two or more parties in which each party makes some promise to the other.
The total future cash available to the principal on a bonded project.
A surety bond guaranteeing the fulfillment of obligations under construction contracts or other types of contracts.
Carriers that furnish transportation services to shippers with whom they have contracts.
A law that provides the contractor prompt, convenient access to a forum for appealing decisions of the contracting officer.
A variety of statements that describe each party's obligations and rights associated with the contract, including the invitation to bidders, bid forms and bond forms, form of agreement, conditions, specifications, drawings and plans, and addenda.
The branch of civil law that deals with contracts and settles contract disputes.
Any contract in which one party must either accept the agreement as written by the other party or reject it.
The agreement between an employer and employee to assume an employment relationship from which both parties reasonably expect to derive some benefit; may be express or implied.
A contract in which the insurer agrees, in the event of a covered loss, to pay an amount directly related to the amount of the loss.
An insurance policy based on the assumption that the insured has voluntarily revealed to the insurer all information pertinent to the risk being insured.
A financial statement that describes the status of job performance.
A comprehensive financial statement that includes the information in the short form report and additional calculations.
A financial statement that provides basic information related to the contract price, billings, costs, gross profit on completion, and the date the work is scheduled for completion.
A classification of bonds that guarantee the performance of the bonded contractor.
A defined period of time in a contract, such as an annuity.
The reinsurer's maximum liability for any one contract year for all losses arising out of all occurrences with dates of loss during that contract year.
A contractor's management, technical abilities, and strengths to perform the work.
A policy that covers mobile equipment or tools while located anywhere in the coverage territory.
An endorsement that is often added to the umbrella liability policies of contractors to restrict coverage for some of the more hazardous exposures faced by contractors.
An insurance policy that covers the pollution-related loss exposures of a contractor.
The tools and machinery used in projects involving construction, renovation, earth-moving, and other activities.
The amounts payable under the contract according to the terms of the contract.
Liability assumed through a hold-harmless agreement.
Coverage for liability that the insured has assumed under an insured contract.
An exclusion that eliminates coverage for liability assumed by the insured under any contract or agreement; broad exceptions to this exclusion provide coverage for "insured contracts."
The endorsement that deletes subpart f. of the CGL coverage form’s insured contract definition, thereby limiting contractual liability coverage to the types of contracts specifically listed in subparts a. through e. of the definition.
The endorsement that modifies the CGL coverage form so that it will cover liability assumed under an easement or a license agreement in connection with operations on or within fifty feet of a railroad.
A right of subrogation created in an indemnity contract.
A key supplier that provides raw materials, supplies, or services needed for another’s business.
The right of a tortfeasor who has paid more than his or her proportionate share of the damages to collect from other tortfeasors responsible for the same tort.
Method of sharing loss when two or more policies apply in which each insurer pays an equal amount until the claim is fully paid or until one insurer exhausts its limit, in which case the other insurer pays the remainder of the claim (up to its limit).
Method of sharing loss when two or more policies apply in which each insurer pays that proportion of the claim that the insurer’s limit bears to the total of all applicable insurance.
A common-law principle that prevents a person who has been harmed from recovering damages if that person's own negligence contributed in any way to the harm.
Group plan in which employees pay part or all of the cost.
The value of the vessel and of each cargo interest that is used in apportioning the general average among the various parties to a maritime venture.
For workers compensation purposes, the employer’s right to give work assignments, direct how the work is to be done, and hire and discharge workers.
Used to demonstrate the variation in a process and to determine whether the variation is the result of common or special causes.
The degree of importance a board of directors and management place on their organization’s internal control system and their related actions.
A metric used to identify an organization’s management of risk.
A hole, bolt, or location on a vehicle body that is used as the measure of structural misalignment.
Three sources: (1) account development, (2) account acquisition, and (3) merger.
A corporation that is registered and conducts business in a country that is different from the country of residency of its controlling shareholders.
Nonadmitted master policy issued in the country in which the insured is domiciled paired with locally admitted policies issued in the foreign countries in which the insured operates.
An insurance arrangement that provides comprehensive coverage for organizations operating internationally by linking one or more master policies written in the organization’s home country to local policies in countries in which the organization does business.
A prescription drug such as Tylenol with codeine.
Risks of an organization that are not part of the corporate system of the captive’s owner but over which the owner exercises some risk management control.
The cosurety that investigates, negotiates, and resolves claims and seeks recovery of the losses and expenses.
The mass movement of heat within a fluid (liquid or gas) caused by the expansion of heated material; the heated fluid becomes lighter and rises.
A type of auto body usually found on trucks and large passenger autos, characterized by a separate steel frame to which the body of the vehicle is bolted.
The unlawful exercise of control over another person's personal property to the detriment of the owner.
An element of the retrospective rating formula that includes the actual losses incurred increased by a factor (loss conversion factor) that reflects loss adjustment expenses.
Characteristic of a term insurance policy that allows the policy to be exchanged for some type of permanent life insurance policy with no evidence of insurability.
A debt instrument that gives the holder the option to convert the bond into another security (generally common stock) of the issuing company at a specified price, within a given time, and under stated terms.
A type of preferred stock that allows the holder to convert it into a stated number of common shares of the issuing company.
Characteristic of a term insurance policy that allows the policy to be exchanged for some type of permanent life insurance policy with no evidence of insurability.
A piece of data to identify a visitor to a website.
A not-for-profit corporation that owns the housing units and the associated property.
A means of sharing the cost of producing and placing advertisements.
A form of real property ownership in which the real property is owned by a corporation whose shareholders are the tenants of the property.
Provision that indicates the order of payment when an insured is covered under two or more group health insurance plans so that the insured's total recovery under all applicable policies will not exceed 100 percent of covered expenses.
A legal obligation of one spouse for damaging the other spouse’s auto.
A provision in a reinsurance agreement that requires the primary insurer to retain a specified percentage of the losses that exceed its attachment point.
Four interdependent elements that are analyzed by commercial property underwriters when evaluating submissions for property insurance; construction, occupancy, protection, and external exposures.
When customers are involved in the production of outputs.
The legal right granted by the United States government to a person or organization for a period of years to exclusively own and control an original written document, piece of music, software, or other form of expression.
A principle that directs an organization’s management’s decisions and employees’ actions.
Evidence of debt issued by a corporation.
A document prepared during the formation of a corporation stating the corporation’s goals and objectives and the kind of business for which the corporation was organized.
The area within the discipline of finance that concerns a corporation’s investing and financing decisions.
The mechanisms and procedures that determine how corporations are run.
The joining of two or more corporations into a single corporation.
A plan that contains senior management’s decisions relating to the organization’s corporate goals.
The process that eliminates factors that created financial distress and preserves the "going-concern" value of a business.
A doctrine that insulates the assets of the owners of the corporation in case the corporation goes bankrupt. The corporation’s owners, the stockholders, are not personally liable for the corporation’s debts.
An entity organized under law and entitled to the same rights as a person, distinct from its owners.
A collection of writings or documents.
A relationship between variables.
The evaluation of the relationship between/among two or more variables.
A statistical measure, ranging from +1 to –1, indicating the degree to which two variables’ movements are associated.
Medical insurance deductible amount an insured must pay under a supplemental major medical insurance plan after the insured’s medical expenses exceed the limits of the underlying basic medical expense plan.
This supports the existence of a phantom vehicle. Evidence to establish negligence of an unidentified vehicle.
Nerve cells that carry motor commands from the brain to the spinal cord.
The systematic tracking, recording, and analyzing of an organization’s expenses relative to its associated products, activities, and departments.
A shipping condition under which the seller is obligated to pay for the freight charges but not for the insurance for delivery to the buyer.
Selling terms under which the seller quotes a price that includes all transportation charges to the named destination and assumes responsibility only for loss or damage and only until the goods have been delivered to the ocean carrier or delivered on board the vessel.
In a life insurance policy or an annuity contract, generally the after-tax amount paid for the policy or contract.
In the context of acquisitions, a measure of the extent to which a company’s costs can be reduced by combining the company with another entity or entities.
A business-level strategy through which a company seeks cost efficiencies in all operational areas.
The opportunity cost of funds provided by investors.
Insurance that covers the cost of bringing a well blowout under control.
The rate of return required to compensate a company’s debt holders for the use of their capital.
The rate of return required to compensate a company’s common shareholders for the use of their capital.
An expense representing the cost of merchandise sold to customers during the period.
An estimate of the amount an insured will spend on hiring autos, excluding charges for (1) vehicles that are not covered, (2) drivers, and (3) services performed by common or contract motor carriers subject to the insurance requirement of any public authority.
The sum obtained by multiplying the death rate at the insured’s attained age by the net amount at risk.
The total cost incurred by an organization because of the possibility of accidental loss.
An income statement value that represents the cost to the company of merchandise sold or services provided during the year (the inventory at the beginning of the period adjusted for all purchases made during the period, less those goods on hand at the end of the period).
An accounting rule that requires an organization's assets to be recorded at their purchase price or production price.
The practice of charging higher fees to payment sources that impose fewer controls.
Selling terms under which the seller's price includes the cost of insurance and freight charges until the goods reach the foreign port of importation and in which the seller's responsibility for loss or damage to the goods is the same as under Cost and Freight (C&F) terms.
A study that compares the likely costs of a product or service with the likely benefits, both to the customer (in meeting a customer need) and to the insurer (in meeting profit and growth objectives).
Insurance rating that attempts to identify and control for every variable that has a significant effect in quantifying differences between otherwise identical risks.
The premium basis for hired autos on a business auto policy. It is an estimate of the amount an insured will spend on hiring autos, excluding charges for truckers; autos owned by the named insured; employees', partners', or members' autos; and public autos.
An agreement that provides payment to the contractor for the cost of the work plus an amount for overhead and profit.
A cost-plus contract that has a ceiling price on the amount the owner will pay for the completed project.
The amount of an imbalance in the billing-cost-profit relationship that results in an underbilling.
A judicial bond that guarantees the payments of costs associated with appealing a lower court's decision.
An accounting process that determines the percentage of completion for uncompleted projects based on a comparison of actual costs incurred with total estimated cost.
An accounting process that determines the stage of completion, or percentage complete, of uncompleted contracts.
Cost of goods sold divided by retail sales.
Two or more sureties that execute the same bond obligation with a principal.
A relationship among two or more sureties who accept and divide a risk.
A classification of bonds that guarantee recovery of replevined (taken back) property until the court makes a final decision.
A complaint brought by the defendant against the plaintiff.
A form of forgery that involves privately duplicating a country’s currency or presenting it as genuine with knowledge that it is not.
A proposal an offeree makes to an offeror that varies in some material way from the original offer, resulting in rejection of the original offer and constituting a new offer.
The risk that the other party to an agreement will default.
Laws that require all policies covering subjects of insurance within a state to be signed by a resident producer licensed in that state.
The amount of interest to be paid on the dates specified in an indenture agreement.
The dollar amount of annual interest a bond will pay.
A bond’s annual interest rate stated as a percentage of its par value.
A system of docket management, which has greatly increased the speed and efficiency of the administration of justice.
A classification of surety bonds guaranteeing that a person or an organization will faithfully perform certain duties prescribed by law or by a court or will demonstrate financial responsibility for the benefit of another until the final outcome of a court’s decision.
In civil proceedings, a classification of bonds that includes judicial, admiralty, and fiduciary bonds.
A legal proceeding in which the court reviews all details of the settlement, then determines whether it is in the best interest of the minor. If the court accepts the settlement, it issues a judgment approving the settlement terms and amount. This effectively releases the claims of a minor.
The relative association between variables to move in tandem or independently of each other.
An agreement in a sales contract made by the seller not to engage in insurance sales in the same geographic area as the agency for a specified period, such as three or five years.
An agreement that states that in exchange for a specified sum of money, the claimant will not sue one of the joint tortfeasors.
Provides coverage on the structure of the home for an indicated amount of insurance. Coverage is usually provided on a replacement cost basis.
Provides coverage on a garage or on other appurtenant private structures not attached to or part of the home.
Covers the homeowner’s personal property within the home and away from the premises.
Provides additional living expense coverage if the home is damaged or rental value if the home is damaged and unable to be occupied.
Scheduled property coverage for eighteen classes of farm personal property
Provides coverage for bodily injury and/or property damage for which the insured is legally liable.
Blanket coverage on unscheduled farm personal property
Covers reimbursement of reasonable medical expenses for injuries sustained by a third party as a result of the insured’s activities, whether or not the insured is legally liable.
Blanket coverage on farm buildings other than dwellings
A component of a CPP or a monoline policy that contains the policy provisions relating to a particular line of business, such as commercial property or commercial general liability; consists of the coverage part’s declarations page, one or more coverage forms, applicable endorsements, and in some cases a general provisions form.
One or more forms that, together, provide coverage for a type of insurance.
Numeric symbols used in a commercial auto policy to indicate which autos are covered for particular coverages.
The event that activates policy coverage.
A custodial savings account, formerly called an Education Individual Retirement Account (IRA), whose earnings grow tax-free on behalf of a minor beneficiary if used to pay for primary, secondary, or postsecondary education expenses.
Persons who were, are, or may be duly elected or appointed directors and officers of the organization, and also the estates, heirs, or legal representatives of deceased directors and officers.
A person who currently holds the CPCU designation.
A book that describes procedures for estimating the cost to repair damage to vehicles and that lists auto part prices and typical labor times to repair or replace the part.
Persuasion—bringing the needs to the customer’s attention in a logical way.
The weight (from 0% to 100%) assigned to current ratemaking data in determining the need for a rate revision.
The level of confidence an actuary has in projected losses; increases as the number of exposure units increases.
The factor applied in ratemaking to adjust for the predictive value of loss data and used to minimize the variations in the rates that result from purely chance variations in losses.
A dollar value that appears on the right side of a double-entry accounting statement.
A reduction in premium that rewards favorable business practices.
The process of evaluating the credit information about an individual or organization.
A bond that guarantees to investors both the interest due and original value of the municipal bond when the bond matures.
The amount of a loan or financing that a surety will extend to a contractor.
In the context of working-capital management, this is the process of evaluating the creditworthiness of customers, establishing trade-credit policies, and managing the overall level of receivables.
Guidelines for determining when to extend credit and the types of credit to be offered.
The risk that customers or other creditors will fail to make promised payments as they come due.
A decision-making tool that uses credit report information to develop a predictive score on the creditworthiness of an applicant for additional credit.
A decision-making tool that uses credit report information to develop a predictive score on the creditworthiness of an applicant for additional credit.
A third-party beneficiary owed a debt that is to be satisfied by performance of a contract.
A vessel designed principally to transport drilling and production platform crews to and from their rigs; often has additional capacity for transporting supplies.
Insurance that covers (1) money and securities against numerous perils (not limited to crime perils) and (2) property other than money and securities against crime perils, such as employee theft, robbery, theft by outsiders, and extortion.
Certain activities deemed by society to be harmful to public welfare.
The branch of the law that imposes penalties for wrongs against society.
The type of liability imposed when an individual or entity is found guilty, beyond a reasonable doubt, of a crime.
An act so harmful to the public welfare that the government takes the responsibility for prosecuting and punishing the wrongdoer, for which remedies include fines and imprisonment.
An unexpected, unstable situation attracting media attention in which the trust and confidence of an organization's stakeholders are threatened. Decisive leadership action is required to ensure the resilience of the organization.
The sequence of activities in a project that take the longest time to complete and determine the overall time length of the project.
A process that identifies every major element of the construction project, as well as a time estimate for each element, and assembles these elements into one master schedule.
An element, necessary for an organization’s success, that is derived from a strategic objective.
A product of the risk priority number elements of consequence and occurrence used to determine the relative risk of a failure mode and effects analysis item.
An analysis that identifies the critical components of a system and ranks the severity of losing each component.
Insurance offered by private insurers that covers crops against loss caused by hail and often other perils.
An accepted standard for the steps in any data mining process used to provide business solutions.
When all partners in a partnership agree to purchase any deceased partner’s interest in the partnership from the deceased partner’s estate; in the agreement, the estate must sell to the surviving partners.
A buy-sell agreement to which only the owners are party and under which surviving owners agree to purchase the business interest of a deceased, disabled, or retired owner.
Questioning an opposing party during a legal proceeding to bring out information favorable to the questioner’s own position or to challenge the witness’s testimony.
A work process performed by people in separate organizations, departments, and divisions.
A customer service organizational structure in which all customer service functions are contained in a single business unit.
A phenomenon in which efforts to protect one medium from harm (and reduce the associated loss exposure to the organization) frequently create new threats and loss exposures in another medium.
Selling new types of insurance products to existing clients.
Designating and training backup employees for every job, or at least a variety of jobs.
The average of 30 percent of the worst losses or deficiencies (ranked highest to lowest) based on stochastic analysis.
The sum of the number of observations in all preceding intervals up to and including those contained in the interval being examined.
An injury that occurs as a result of repetitive motion, stress, or trauma. These injuries are traceable to a certain time period and to separate incidents but not to identifiable points in time and place.
The aggregate amount that an obligee can recover under two or more bonds, filed in succession, from the same principal.
A security that gives the holder the right to receive accrued unpaid dividends before any dividends can be paid to the common stockholders.
An injury caused by continuously performing a task over an extended period.
A system for electing corporate directors whereby a stockholder can multiply his or her number of shares by the number of open directorships and cast the total for a single candidate or a select few candidates.
A remedy for injured sailors and crew members to receive medical care, encompassing a broad array of hospital and related medical costs, including rehabilitation.
A reinsurance treaty clause that specifies the base currency for the treaty and the basis of any conversion to the base currency.
A balance sheet asset classification that includes cash and other assets that are expected to be converted into cash, sold, or exchanged within the business’s normal operating cycle, usually one year.
The interest rate, excess of any guaranteed interest rate, at which an insurer credits interest under its interest-bearing insurance products.
A balance sheet liability classification that includes obligations whose payments are reasonably expected to require the use of cash or the creation of other current liabilities within one year.
The ratio of the sum of all cash and all unaffiliated invested assets (excluding real estate) to net liabilities and ceded reinsurance balances payable, expressed as a percentage.
The outstanding case loss reserve at the beginning of the period, less net paid losses during the current accounting period.
A liquidity ratio that indicates the company's ability to meet its short-term financial obligations; calculated by dividing current assets by current liabilities.
A sensor that detects electric current and converts it to a measured output.
The annual interest on a bond divided by its current market price.
A funded retention arrangement under which money to fund retained losses is provided at the time of the loss or immediately after it.
A partial fire wall that, when installed in conjunction with roof vents, helps contain hot smoke and gases and aids exterior venting to simplify fire suppression.
The named insured, any of the named insured’s partners or members, or the named insured’s employee while having care and custody of the property inside the premises; excludes any person while acting as a watchperson or janitor.
An individual designated by the Veterans Administration to disburse benefits owed to an incompetent veteran or his minor children.
Farming operations the insured performs at another location under the direction of the landowner
A person who receives outputs.
The provision in the ADCF that severely restricts coverage for customers of the insured auto dealer.
Occurs when an organization looks toward its customers and responds to them.
A bond form that covers all activities by Customs and Border Protection. The customs bond form can apply to either a single entry or shipment or all entries or shipments within the one-year bond term.
Legislation that describes Customs and Border Protection's computerized processing. The act mandates rigid rules and time frames for duties, fines, penalties, and forfeiture claims incurred because of improper data reporting.
A reinsurance treaty provision that allows the reinsurer's responsibility for losses occurring under the primary insurance policies to end at the treaty's termination date.
An endorsement that provides that, in the event of the insolvency of the primary insurer, the reinsurer directly assumes the obligations of the primary insurer.
The amount of material that is left over after cutting and fitting to size for repair.
The possibility that data will end up in the possession of a party who is not authorized to have that data and who can use it in a manner that is harmful to the individual or organization that is the subject of the data and/or the party that collected and stored the data.
Any condition that presents the possibility of financial loss to an organization from property, net income, or liability losses as a consequence of advanced technology transmissions, operations, maintenance, development, or support.
The total duration of a process from start to finish.

D

Extends coverage for property in the care, custody, or control of an insured.
Money claimed by, or a monetary award to, a party who has suffered bodily injury or property damage for which another party is legally responsible.
When UIM coverage is determined by the deficiency of limits to a person’s damages.
A legal doctrine in which a parent is liable for negligently permitting a child to obtain or use a dangerous instrumentality that harms a third party.
Information recorded in a magnetic code that is used in or with a computer.
Raw data in an ordered format from which information can be derived.
An incident in which confidential or privileged information that is stored in a computer system is accessed or obtained by an unauthorized party.
A multidimensional partitioning of data into two or more categories.
A cross-functional team that oversees data governance for an organization to ensure that its data is managed effectively.
A thorough and systematic data quality process that traces data from its source to its destination to identify errors, inaccuracies, or inconsistencies.
A subset of a data warehouse.
Software application that hides sensitive information by replacing it with plausible camouflage data.
The process of extracting hidden patterns from data that is used in a wide range of applications for research and fraud detection.
The analysis of large amounts of data to find new relationships and patterns that will assist in developing business solutions.
An interdisciplinary field involving the design and use of techniques to process very large amounts of data from a variety of sources and to provide knowledge based on the data.
A group of data.
The use of a database or a collection of databases developed for an organization or an enterprise for analysis and support of management decisions.
A collection of information stored in discrete units for ease of retrieval, manipulation, combination, or other computer processing.
An organizational process to gather and analyze relevant and verifiable data and then evaluate the results to guide business strategies.
A collection of variables in a table; a structure with rows and columns for storing data.
A 1931 federal act that prohibits the federal government from funding any construction project on which wages are below the prevailing wage for the area.
A measure of the number of days it takes, on average, for a company to collect its accounts receivable.
A corporation formed in good faith and with a reasonable attempt to comply with the law, but failing to meet a minor requirement.
A corporation formed in compliance with law.
Operating a truck-tractor with a trailer that is empty.
The difference between a vessel's loaded displacement and its light displacement, representing how much weight the vessel can carry.
One who sells new or used private passenger autos, trucks, motorcycles, recreational vehicles other than mobile homes, mobile equipment, or farm implements.
The endorsement that modifies the Auto Dealers Coverage Form to cover an auto dealer for collision damage to any covered auto while being driven or transported from the point of purchase or distribution to its destination if such points are more than fifty road miles apart.
A policy that covers the inventory and other property of any of the types of dealers that qualify for inland marine coverage (such as jewelers, equipment dealers, fine arts dealers, and furriers).
The amount of life insurance proceeds paid under a life insurance policy at the death of the insured.
Provides payments to survivors (dependents) for their loss as a result of a person killed in an accident. Payment is based on specified limit for the income loss. (Surviving dependents normally have the ability to sue for other damages as well.)
A certificate that identifies the cause of death and any contributing factors leading to the death.
A U.S. statute that allows recovery for death "caused by wrongful act, neglect or default occurring on the high seas beyond a marine league from the shore of any State."
A debt instrument that is an unsecured general obligation of the issuing corporation.
A dollar value that appears on the left side of a double-entry accounting statement.
An increase in the premium on a bond that presents a greater risk of loss.
Coverage that pays for removal of debris of covered property damaged by an insured peril.
A debt obligation issued by a corporation or government unit that promises to pay interest periodically at a stated rate and/or to pay the bond principal at a specified maturity date.
A financial account used by a governmental entity for accumulating cash to retire long-term debt, principal, and interest.
A principal in bankruptcy that retains control of its assets.
A leverage ratio that shows the extent to which a company's assets are financed by debt; uses balance sheet data and is calculated by dividing total liabilities by total assets.
A leverage ratio that measures the extent to which a company is financed using borrowings rather than its own funds (owners' equity).
The deceased claimant in a death claim.
Depreciation that occurs slightly for a given time period and then increases rapidly.
A process that determines what kinds of decisions are needed, where in the organizational structure those decisions should be made, and to what extent each manager should be involved.
An insurance policy information page or pages providing specific details about the insured and the subject of the insurance.
A ruling by a court to determine whether an insurance policy provides coverage.
A legal action in which the insurer (or insured) presents a coverage question to the court and asks the court to declare the rights of the parties under the applicable insurance policy.
An insurer’s refusal to provide coverage to an applicant who has made a written request to the insurer or its producer, or a producer’s refusal to forward such a written request to an insurer.
The process by which a receiver interprets a sender's message.
A detailed dissection into manageable pieces; a breakdown into essential elements.
A portion of a covered loss that is not paid by the insurer.
A method of transferring the cost of losses that fall under the deductible of an insurance policy.
The endorsement that adds either a per claim deductible or a per occurrence deductible to the CGL coverage form.
An amount that reduces an individual's income subject to tax.
A written instrument that transfers interest in real property.
State law providing that if a department of insurance does not disapprove of an insurer’s filed forms within the time the deemer provision specifies, the forms are deemed approved and can be issued by the insurers filing the forms.
A law stating that if an insurance regulator does not approve of an insurer’s filing within a specified time, the filing is deemed approved.
Insights into data use and processing gained by combining artificial intelligence and machine learning. It is based on algorithms derived from artificial neural networks.
A false written or oral statement that harms another's reputation.
A debtor’s failure to make timely payments of interest and principal as they come due or to meet some other bond indenture provision.
An automatic judgment against a party to a lawsuit who fails to appear in court or to answer a pleading.
The party in a lawsuit against whom a complaint is filed.
A judicial bond guaranteeing that a defendant who appeals an adverse decision to a higher court will pay the entire judgment, plus court costs and interest, should the higher court sustain the initial judgment for the plaintiff.
Loss adjustment expenses relating to defending, litigating, or containing costs of a claim, which may include expenses stemming from investigations, containing medical costs, and surveillance.
Costs of adjusting a claim that can be assigned to a specific claim.
A federal statute that extends the provisions of the United States Longshore and Harbor Workers' Compensation Act (USL&HW) to the employees of government contractors outside the continental U.S.
A payment arrangement that gives law firms an opportunity to share the rewards of controlling costs and insurer loss payouts. If the defense lawyer succeeds in keeping awards as low or lower than agreed on in advance, the lawyer is rewarded the higher fee.
Any reaction that serves to protect a person against something harmful or to resolve or conceal anxieties.
A person's motion or posture suggesting suspicion, distrust, or dislike.
A doctor’s practice of ordering more diagnostic tests and performing more expensive procedures than are necessary in response to the increasing threat of medical malpractice lawsuits.
An accounting approach in which the focus is to coordinate the timing of income and expense recognition so that both occur when the triggering event that is the focus of the contract occurs.
The recognition of the cost of acquiring a new customer over the duration of an insurance contract.
An annuity with an accumulation period that usually lasts a number of years.
When a portion of the employee’s income is deferred to a retirement fund
Premium for the current policy year that is not yet due on the statutory reporting date.
Accounts that recognize expected future tax benefits or obligations that arise from temporary differences between valuations on the balance sheet being reported and those on the tax balance sheet.
A retirement plan that specifies definitely determinable participant benefits payable at retirement.
A pension plan that is based on the monthly retirement benefit rather than on the contribution rate.
A retirement plan in which employer and employee contributions are allocated to participants’ accounts and participant benefits are based on the account balance.
A pension plan in which the contribution is a percentage of the participating employee’s earnings or a flat dollar amount.
A loss must be defined by what caused it, where and when it happened, and what its value is.
A bond that remains in force for a specified period of time and expires at the end of the term. Alternatively referred to as a term bond.
A section of an insurance policy that defines terms used throughout the policy form.
A reinsurance treaty clause that defines the terms used in the treaty.
A description of a condition and its cause.
A combustion classification in which an explosion proceeds at a velocity slower than the speed of sound.
The measure of the number of connections each node has.
The percentage change in earnings per share divided by the percentage change in EBIT.
Expression of undisclosed underlying attitude.
A clause that excludes coverage for loss caused by delay, such as loss of market, spoilage, and business interruption.
An economic agent appointed to act on behalf of smaller investors in collecting information and/or investing funds on their behalf.
A text file format in which the fields are separated by a character, called the delimiter.
The separator between data fields in a delimited text file format.
A collaborative estimating strategy using expert input to reach consensus by continuously refining individual responses.
A type of sprinkler system in which all the heads remain permanently open; when activated by a detection system, a deluge valve allows water into the system.
The willingness and ability of consumers to buy a product.
A form of government by the people through elected representatives.
The common characteristics of a group of people, which can be used to identify market segments.
The division of markets by demographic variables.
The statistical characteristics of human populations.
Tangible items that were constructed after the original occurrence to prove the facts presented by the litigants. These visual or artificial aids help the judge and jury to better understand the facts.
Any time that exceeds the allotted time for loading and unloading railcars.
The process by which a mutual insurer owned by its policyholders becomes a stock company, which is then owned by its stockholders.
A diagram that illustrates the groupings from hierarchical clustering.
A defense mechanism in which a person does not acknowledge some aspect of reality.
An attempt to overwhelm a computer system or network with excessive communications in order to deny users access.
An agency that regulates the oil industry and ensures compliance with laws.
Income required while children are dependent.
Endorsements that cover loss of business income at the insured’s location resulting from damage to property at another business on which the insured is dependent.
The possibility of incurring business income loss because of physical loss occurring on the premises of an organization that the insured depends on for materials, products, or sales.
The variable being forecast.
In a regression analysis model, the variable whose values are explained by the changes in the independent variable.
A balance sheet liability representing amounts owed to another party, equaling the net amount received from the other party, possibly including interest on that liability.
The amount the primary insurer pays the reinsurer pending the determination of the actual reinsurance premium owed.
The amount a policyholder pays at the beginning of a policy period, pending the determination of the actual premium owed.
A pretrial discovery tool involving oral examination of a witness to produce a written verbatim record.
Rules that designate specific bank depositories and that often limit the amount deposited in any one bank.
Institutions for which a significant proportion of funds come from customer deposits, including commercial banks, savings institutions, and credit unions.
The surety’s liability for loss if the principal’s bank depository fails.
Life insurance products whose benefit payments are not contingent upon death, disability, or continued survival (as with annuity contracts) and include guaranteed insurance contracts, annuities certain, and dividend accumulations.
The reduction in value caused by the physical wear and tear or technological or economic obsolescence of property.
An accounting method that spreads out the expense of a purchase over the life expectancy of the item.
The psychological diagnosis characterized by sadness or grief. Severe symptoms include the loss of pleasure and interest in life and feelings of complete hopelessness.
A financial contract that derives its value from the value of another asset.
A consortium-type claim.
A lawsuit brought by one or more stockholders on behalf of the corporation, with any resulting damages recovered going directly to the corporation, not to the plaintiff-stockholder(s).
A financial security whose pay-off is linked to other, previously issued primary securities.
The markets in which derivative securities trade.
A lawsuit brought by one or more shareholders in the name of the corporation.
An individual's perceived credibility during interpersonal communication.
A model used to study and find relationships within data.
A single number used to describe or summarize a feature of an entire data set.
Quantitative summaries of the characteristics of a dataset, such as the total or average.
A patent issued for a design that is new or innovative or that is ornamental or aesthetic in nature.
A construction method that offers "one-stop shopping" to property owners for design and construction services.
An agreement that enables the contractor to both design and construct the building.
Any identifiable individual designated by a qualified retirement plan participant or owner to receive any remaining plan benefits after the participant dies.
A feature that combines the advantages of a Roth IRA with the convenience of a 401(k) plan.
A person who has earned the CPCU designation, regardless of whether he or she has officially become a CPCU.
A target market conduct examination in which DOI examiners review some of an insurer’s business records in DOI offices.
The commercial crime endorsement that covers the cost to restore or replace electronic data or computer programs stored in the insured’s computer system if such property is damaged or destroyed by a computer virus or vandalism.
A system designed to alert the owners and others performing surveillance that a theft is in progress or has occurred.
Controls designed to detect errors or inconsistencies after they have occurred.
A combustion classification in which an explosion proceeds at a rate greater than the speed of sound; a shock wave is produced.
A situation in which an insured relies on the words or actions of an insurer and that reliance harms the insured’s financial position.
An actuarial tool to represent expected development in claims, reserves, and other values, building on historical information and taking a triangular shape as one time period extends into the next.
A request that an insurer files with state insurance regulators to deviate from insurance advisory organization-developed loss costs.
A party that receives real property through a will.
The process of removing accumulated water from an excavation or a trench, usually accomplished using pumping equipment and hoses.
Marks, such as accents, used in some languages to indicate pronunciation.
In medicine, the term for a person’s illness or syndrome determined by scientific methods, including evaluation of the history of the illness, of the patient’s symptoms, and of the results of laboratory testing.
A system to remind claims personnel to perform a particular task on a claim.
A policy that covers on an “all-risks” basis to fill gaps in the insured’s commercial coverage.
Policy that covers on an “all-risks” basis to fill gaps in the insured’s commercial property coverage, especially gaps in flood and earthquake coverage.
Coverage, usually added to cargo policies by endorsement, that protects a buyer who has purchased goods on selling terms in which the seller provides insurance until the goods reach their final destination; extends the buyer's policy to cover
A policy that provides coverage for gaps resulting from different limits in a commercial insurance program.
The change in an organization's aggregate annual net cash flows resulting from implementing a proposal.
A market that contains a number of marketing segments, each with its own characteristics requiring separate marketing strategies.
A business-level strategy through which a company develops products or services that are distinct and for which customers will pay a higher price than that of the competition.
A surplus lines regulatory requirement establishing that coverage for the risk is unavailable from admitted insurers.
A signed statement summarizing efforts to find coverage from admitted insurers and establishing that coverage for the risk is unavailable in that market.
A business intelligence method used to convert transaction data into hierarchical structures for enterprise wide decision analysis.
The reduction in earning ability resulting from a disability.
The real or perceived loss in market or resale value that results from a direct and accidental loss.
Permitted in some jurisdictions when property is damaged and repaired.
A font that contains symbols and shapes in places normally occupied by letters or numbers.
A stockholder’s civil lawsuit against a corporation.
A payment procedure in which the insurer assumes all responsibility for sending premium bills to the insured, collecting the premium, and sending any commission payable on the premium collected to the producer.
A payment procedure in which the insurer assumes all responsibility for sending premium bills to the insured, collecting the premium, and sending any commission payable on the premium collected to the producer.
A payment procedure in which the insurer assumes all responsibility for sending premium bills to the insured, collecting the premium, and sending any commission payable on the premium collected to the producer.
Questioning one’s own witness during a legal proceeding.
An approach for managing bodily injury claims while the patient is undergoing treatment, using concurrent reviews, independent medical exams, medical case management, and disability management.
A reduction in the value of property that results directly and often immediately from damage to that property.
A loss that is physical (not just financial) and results immediately from the occurrence.
A question that seeks specific information and that can often be answered with a short phrase or a yes or no response.
A reinsurer that has direct contact with the primary insurers it serves.
A program by which insurers provide a network of repair facilities that meet the insurer’s criteria for quality work at cost-effective prices.
A system of insurance marketing that relies primarily on mail, phone, and/or Internet sales, without the services of an agent.
An insurance distribution channel that markets directly to the customer through such distribution channels as mail, telephone, or the Internet.
A corporation’s sale of its stock or debt directly to investors without going through a financial institution.
An insurance marketing system that uses sales agents (or sales representatives) who are direct employees of the insurer.
A captive insurer that issues policies to and pays losses arising from the claims of its owner(s), members, or participants.
A captive insurer that issues policies directly to its parent(s) and affiliates and does not use a fronting company.
An insurer that markets its coverages directly through its own employees rather than through intermediaries.
A professional reinsurer whose employees deal directly with primary insurers.
Agents who are employees of their companies and do not own the business they write.
A law that permits a negligence victim to sue an insurer directly or to sue both the insurer and wrongdoer jointly.
An edge within a network graph that has direction.
This verdict ends a trial before deliberations begin. The attorney for the defendant moves to dismiss the case because the plaintiff failed to provide enough evidence to support the allegations in the lawsuit.
Insurance that covers a corporation’s directors and officers against liability for their wrongful acts covered by the policy and also covers the sums that the insured corporation is required or permitted by law to pay to the directors and officers as indemnification.
The inability (because of impairment) of a person to meet his or her personal, social, or occupational demands; other activities of daily living; or statutory or other legal requirements.
A type of health insurance that provides periodic income payments to an insured who is unable to work because of sickness or injury.
Direct intervention techniques, such as rehabilitation and patient education, that help to reduce the disability of an injured person.
The loss of property with no reasonable explanation.
A deductible that decreases in amount as the amount of loss increases, and disappears entirely to provide full coverage after a loss surpasses a specified amount.
In the context of disaster recovery, an event that is so significant it triggers implementation of an organization’s disaster recovery plan.
A plan for backup procedures, emergency response, and post-disaster recovery to ensure that critical resources are available to facilitate the continuity of operations in an emergency situation.
A risk management technique in which the insured prepares for a loss before it occurs.
The prospect doubts that the policy can perform as indicated.
The decrease in book cash without an immediate change in bank cash that occurs when a company issues a check.
Extension of the disc wall associated with some degree of defect or tear.
The removal of disc material, exploration of the space, and removal of any disc fragments.
The process of establishing a program for the type and amount of treatment after a patient is discharged from the hospital.
A statement issued by an auditor that indicates the inability to formulate an opinion; reasons could include auditing restrictions imposed by the client or a lack of independence.
A principal whose existence and identity are known to the third party dealing with the agent.
A diagnostic imaging procedure in which an imaging dye is injected directly into the nucleous pulposus of the disc to detect the extent of disc damage and the patient’s pain response when the dye is injected.
A single abrupt shift from the past.
The difference between a bond’s current market price and its par value.
Stockbroker who conducts trades for customers but who does not offer investment advice.
The rate of return used in determining the present value of a future sum.
The interest rate on loans made by Federal Reserve Banks to depository institutions.
The facility through which Federal Reserve Banks issue loans to depository institutions.
The process of calculating the present value of a future amount.
A pretrial exchange of all relevant information between the plaintiff and defendant.
Occurs when an attorney attempts to bury the defendant in broad discovery requests that ask for every document in the possession or knowledge of the defendant. If the defendant fails to produce every item, a “discovery fraud” issue becomes the center of the plaintiff’s presentation to the jury.
Provides that the statute of limitation does not begin to run until the injury is discovered or should have been discovered.
Form that covers losses discovered during the policy period even though they may have occurred before the policy period.
An act by a public official that requires the application of judgment and reason to the circumstances.
A bond required by a controlling authority who prescribes the bond terms.
An endorsement that extends business income forms to cover payroll expenses for specified job classifications or employees regardless of whether such expenses are necessary to resume operations.
The increased loading in the insurance rate applied to specific classification codes that reflect specific disease hazards inherent in the operations described by those classifications.
Withdrawal of deposits from depository institutions to be reinvested elsewhere, such as in money market mutual funds.
The complete displacement of one or both bones of a joint.
A communication of false business statements about the business practices of a person or company that damages the company in the public’s eye.
Indirect discrimination against a group.
A legal basis for an employment discrimination complaint requiring the plaintiff to establish that an apparently neutral employment practice or criterion, applied equally to all individuals, operated to exclude a disproportionate number of the protected class.
Unfavorable or unfair treatment of someone in comparison to other similar individuals.
A legal basis for an employment discrimination complaint requiring the plaintiff to establish the employer’s practice of intentionally treating individuals differently solely because of their sex, race, color, religion, or national origin.
The variation among values in a distribution.
A fracture in which the bone moves out of alignment.
A defense mechanism in which a person directs emotionally significant feelings away from their real source or object and toward some other object.
The empty vessel's weight measured in long tons (2,240 pounds).
Refers to laws requiring motorists to comply with traffic signs that are erected by a governing authority. The sign must be readable and visible.
A phase in the life of a system when the system reaches the end of its useful life and is disposed of.
A corporation’s termination.
A bond that guarantees payment of any damages to the plaintiff because the defendant acted, or did not act, under the original injunction.
Learning that focuses on delivering training to learners at their homes or job locations that is specifically developed for delivery in online or electronic media.
A landlord’s right to seize possession of a tenant’s property and hold it for rent when the tenant has defaulted on the rent.
A risk characterized by unfavorable attributes that have made it unacceptable to admitted insurers.
An arrangement consisting of multiple computers that are interconnected and work together on a common project.
A person or an entity that benefits from the service of, or financial responsibility provided by, a fiduciary.
The channel used by the producer of a product or service to transfer that product or service to the ultimate customer.
The part of a savings program during which accumulated funds are disbursed.
The necessary people and physical facilities to support the sale of insurance products and services.
Adversarial negotiation in which the parties compete for resources while conceding little to the negotiation process.
A risk that affects only some individuals, businesses, or small groups.
A risk control technique that spreads loss exposures over numerous projects, products, markets, or regions.
In the context of an investment portfolio, the process of reducing a portfolio’s company-specific risk by investing in an array of financial assets.
The technique of reducing one’s overall investment risk by investing in several different financial assets.
The authority of federal district courts to hear cases involving parties from different states that involve amounts in controversy over a legal minimum.
Indicates that the parties to a lawsuit are from different states, so the case is “removed” from the state court to a federal district court.
The disposal or sale of part of a company.
A corporate-level strategy through which a company sells off a portion of an operation, usually a division or profit center that is not performing to expectations.
A financial model that assumes that the price of a common stock is equal to the present value of the future dividend stream in perpetuity.
Dividends paid divided by earnings.
An insurer's policyholder dividends for a given period divided by its earned premiums for the same period.
The amount of dividends received per share of stock owned, expressed as a percentage of the value of the investment at the beginning of the period.
The portion of an organization's profits that is paid to shareholders.
The ability to divide or split a large investment into smaller portions so that more investors can participate.
An organization’s procedures that separate the functions of the individuals who may make or inquire about deposits, have joint control over bank accounts, or provide joint signatures for checks or safe-deposit box entry.
An organizational structure in which groups are organized by the products they produce, the geographic regions in which they operate, or the markets they serve.
A legal doctrine that provides for an ambiguous insurance policy clause to be interpreted in the way that an insured would reasonably expect.
The principle that lower courts must follow precedents set by higher courts.
The act of filing, maintaining, storing, and retrieving applications, photographs, inspection reports, policyholder correspondence, and all other underwriting documents.
Includes written items such as contracts, letters, instruction manuals, sales brochures, and other writings that can help establish liability or damages.
A federal law enacted in the wake of the 2008 financial crisis that transforms the regulatory structure for financial services, increases oversight of financial markets, and institutes new consumer protections.
Bulletins that list pertinent information about construction projects, track construction projects throughout the country, and record successful bidders.
The systematic investing of the same amount of money in the same stock or group of stocks over a period of time, regardless of the changing share prices.
Limits a person’s right to sue for noneconomic damages until a certain dollar amount is spent for medical care.
An insurance premium and loss exchange in which the insured pays the insurer premiums for low value losses, and the insurer pays the same dollars back to the insured, after subtracting expenses.
An insurer doing business in the jurisdiction in which it is incorporated.
An insurer doing business in its home jurisdiction.
The country or state/province that licenses an insurer and has primary regulatory authority over it.
An accident causation theory that presumes that accidents are the end result of a chain of accident factors.
The recipient of a gift.
A third-party beneficiary who receives the benefit of a contract’s performance as a gift from the promisee, with the intent of the contracting parties.
The giver of a gift.
A shipment that is sealed in a container at the shipper's premises and is not opened until it reaches the consignee's premises.
A shipment that is sealed in a container at the shipper's premises and removed from the container at the port of destination.
A partner who is neither known to the public nor active in the business.
A method of recording financial transactions in which each transaction is entered into two or more accounts to provide a two-way, self-balancing posting.
A type of commercial paper containing an unconditional order by the drawer (person making out the draft), requiring the drawee, usually a bank, to pay a certain sum to the payee or to the bearer.
The area from which a fire can draw atmospheric oxygen.
The authority expressly given to an agent by an insurer allowing the agent to settle and pay certain types of claims up to a specified limit.
Employees engaged exclusively in drafting and confined to office work.
A statute holding establishments that serve alcoholic beverages responsible for harm that results from serving patrons alcohol in violation of the statute.
A vessel (usually a barge) equipped with excavation equipment to remove mud, sand, or other material from the bottom of a harbor or waterway.
A vessel that has been equipped with a derrick and other necessary equipment for offshore drilling.
Coverage for named individuals who do not have a PAP for liability, medical payments, uninsured motorists, comprehensive, and collision coverages.
The endorsement that can be used to extend the coverages of the Business Auto Coverage Form to the individuals named in the endorsement (and their spouses) while using autos they do not own and that do not qualify as covered autos under the policy.
A draft and release sent to the claimant for an amount the claims representative thinks would settle the claim.
A floor safe with slots through which large-denomination bills can be deposited throughout business hours.
Coverage provided by many umbrella liability policies for (1) claims not covered at all by the underlying policies and (2) claims that are not covered by an underlying policy only because the underlying policy’s aggregate limits have been depleted.
A type of fire suppression system in which finely divided powders are distributed through pipes to nozzles positioned to allow for full distribution over the fire exposure area.
A dock from which water can be pumped out and that is used for building ships or for repairing ships below their waterline.
Automatic fire sprinkler systems with pipes that contain compressed air or another inert gas that holds a valve in the water line shut until an open sprinkler head releases the gas and allows water to flow through the previously dry pipe to the sprinkler head.
A sheet of plaster material covered on both sides with a fiber paper bond; usually comes in 4-foot widths and 8- or 12-foot lengths.
A relationship in which the agent represents both a buyer and a seller to conduct a transaction between them.
The coexistence of both nationally and state-chartered banks.
A legal doctrine giving the employee the right to sue the employer when the employer acts in a capacity other than that of employer.
An organizational structure in which two people have responsibility for the same items or operations.
A claim in which an employee contends that the employer was acting in a capacity other than that of employer and that, therefore, the employee is entitled to pursue a claim in tort separate from a workers compensation claim.
A legal doctrine giving the employee the right to sue the employer when the employer acts in a capacity other than that of employer.
Firms organized to have two outstanding classes of common stock with differential voting rights assigned to each class.
An employee trip having both business and personal purposes.
A type of integrated risk insurance plan in which the retention and limit are tied to two different types of risk and that requires the insured to incur a loss above a certain threshold under each of the two types of risk during the same time period in order to trigger coverage under the policy.
The process of examining a company’s operations, finances, and management and verifying material facts that affect company value.
The Fifth Amendment to the U.S. Constitution, guaranteeing notice and a hearing before the federal government can deprive any person of life, liberty, or property; and the Fourteenth Amendment’s extension of these the same requirements to state government.
Procedural rights involving established rules and principles that protect and enforce substantive rights.
The act of selling a large quantity of goods at less than fair value, including selling goods abroad at less than the market price at home.
A risk control technique that uses backups, spares, or copies of critical property, information, or capabilities and keeps them in reserve.
An analysis of ROA and ROE by breaking them down into their component ratios.
A measure of a security's weighted average life.
In the context of bonds, a measure of the number of years required to recover the true cost of a bond, considering the present value of all coupon and principal payments to be received in the future.
The use of restraint, violence, or threats of violence to compel a party to act contrary to his or her wishes or interests.
The insurer’s obligation to pay the costs of legal counsel for an insured.
The building and everything attached to it.
Fire and related perils coverage for residential structures or personal property not eligible for a homeowners policy.
A method of maintaining the proper position of a semi-submersible drilling unit through the use of an onboard computer that activates thrusters in response to input from various sensors.

E

The most the insurer will pay for the sum of the following arising out of a single occurrence: (1) damages for bodily injury and property damage under Coverage A and (2) medical expenses under Coverage C.
The maximum amount an insurer will pay for all covered losses from a single occurrence, regardless of the number of persons injured or the number of parties claiming property damage.
The maximum amount an insurer will pay for injury to any one person for a covered loss.
An automatic fire sprinkler system that protects high-rack storage without in-rack sprinklers by discharging large and small drops of water at a much higher rate than standard sprinklers to protect smaller areas; large drops penetrate the fire plume, while small drops dissipate heat.
An exposure unit for which an insurer has provided a full period of coverage.
The portion of written premiums that corresponds to coverage that has already been provided.
An amount that can be offset against bank fees and that is calculated by using an earnings credit rate (ECR) based on the level of deposit funds in a business checking account.
The maximum expected loss of earnings within a specific degree of confidence.
A ratio that is calculated by dividing net income by the weighted average number of common shares outstanding during the accounting period.
A process by which a company reduces its overall tax liability by moving earnings from one taxing jurisdiction, typically a high-tax jurisdiction, to another jurisdiction, typically a low-tax jurisdiction.
Equipment that clears job sites and moves, eliminates, or compresses large amounts of earth, rock, snow, debris, construction materials, and other materials.
The point on the earth’s surface directly above the earthquake focus.
The point on an earthquake fault line where the movement of the plates begins.
A nonpossessory right to use another person’s real property for a particular purpose.
The amount of capital required by an organization to ensure solvency at a given probability level, such as 99 percent, based on the fair value of its assets minus the fair value of its liabilities.
Practices allowing financial institutions to allocate capital to the economic effects of risk-taking activities.
Out-of-pocket medical expenses and lost wages.
Data regarding interest rates, asset prices, exchange rates, the Consumer Price Index, and other information about the global, the national, or a regional economy.
The change in a company’s net worth during a particular period.
Information used to evaluate changes in macro-economic information for production, distribution and consumption of goods and services with country data on labor, finance and taxation that affect risk management decisions.
A loss that can be quantified in dollars.
The amount that property is worth based on the ability of the property to produce income.
A reduction in the average cost of a product or a process as the size of a company increases.
A link in a network.
See Electronic data processing (EDP) equipment floater.
A series of bulletins developed by PAAS that provide timely information regarding education, legislation, and technology issues to premium auditors.
The rate of interest that reflects the effect of compounding more than once a year.
The study of a failure’s consequences to determine a risk event’s root cause(s).
Tests of efficiency used to measure a firm’s ability to use its resources.
The collection of securities portfolio combinations that generate the highest expected return for a given level of risk or that have the lowest risk for a given expected return.
A hypothesis that asserts that stock prices reflect the expectations of all market participants and that no individual investor has superior knowledge.
A person who was in poor but functioning health at the time of the loss, but after the loss, he or she became severely disabled and dysfunctional.
A network composed of an ego and the nodes directly connected to it.
Two opinions issued by the Emerging Issues Task Force of the Financial Accounting Standards Board (FASB), which, taken together, require an insured under a finite risk insurance plan to recognize the retained portion of losses as they are incurred for financial accounting purposes.
Willingness to purchase a product that varies significantly with price.
The voluntary act of choosing between two alternative rights or privileges.
The complete distribution of electromagnetic radiation, measured by frequency or wavelength.
The coverage form that covers the insured’s liability for loss of electronic data caused by an “electronic data incident,” which encompasses a broader range of loss-causing events than does the Electronic Data Liability endorsement.
The endorsement that modifies the CGL coverage form’s property damage definition to include loss or loss of use of electronic data resulting from physical injury to tangible property.
A policy that covers computer equipment, software, and electronic data.
A system that moves funds from one institution to another by means of electronic signals rather than the physical exchange of money or checks.
Include items subject to loss, causal forces (perils), and the financial impact of the occurrence.
Initial time period in a health insurance or disability income policy during which benefits are not paid.
The fraudulent taking of money or other personal property by one to whom that property has been entrusted.
A gesture substituted for words.
The disaster recovery plan phase in which the insured initiates a pre-loss plan.
Initial phase of a community’s participation in the National Flood Insurance Program in which property owners in flood areas can purchase limited amounts of insurance at subsidized rates.
The right of a government to seize private property for public use.
Character icons that represent emotions or actions.
A highly unpleasant mental reaction resulting from another person’s conduct, for which a court can award damages.
An injury to a person’s psyche.
An individual’s ability to recognize, understand, and distinguish among emotions and to use that information to manage thinking and behaviors and their effect on other people. Often referred to as EQ (from emotional quotient).
A probability measure that is based on actual experience through historical data or from the observation of facts.
A person hired to perform services for another under the direction and control of the other party, called the employer.
A form of compensation that workers may receive from their employers in addition to their salaries or wages.
The endorsement that modifies the CGL coverage form to cover damages because of negligent acts, errors, or omissions in administering the named insured’s employee benefits program.
Insurance that covers an employer against liability claims alleging improper advice or other errors or omissions committed while administering the employer’s employee benefit plans.
Dishonest acts committed by employees, whether identified or not, acting alone or in collusion with other persons, except a partner, with intent to cause loss to the insured and to obtain a financial benefit for the employee or someone he or she chooses.
Insurance against loss of money, securities, or other property because of an employee’s dishonest act committed with manifest intent to cause a loss to the insured and to obtain a financial benefit for the employee or another person or organization that the employee wants to receive the benefit.
The endorsement that covers an employee of the named insured while operating an auto rented in the employee’s name, but only while the employee is performing duties related to the conduct of the named insured’s business.
The orderly dispersal of authority throughout an organization to gain employee commitment to meeting or exceeding customers’ needs.
An arrangement in which a third party provides a firm with employees for a fee.
A qualified retirement plan that is funded by the employer’s stock.
Unlawful taking by an employee of money, securities, and other property to the deprivation of the insured
The commercial crime insuring agreement that covers theft of money, securities, and other property committed by the insured’s employees.
The endorsement that modifies employee theft coverage to apply on either a name schedule basis or a position schedule basis.
The endorsement that broadens the Business Auto Coverage Form to cover employees as insureds while using their own autos on the named insured's behalf.
A person who hires another person (employee) to perform services and under whose direction and control that person functions.
The difference between the worker’s wage and the contractor’s hourly rate; includes costs such as taxable and nontaxable benefits, unemployment tax, Social Security tax, and insurance costs.
Insurance that protects an employer against employee injury claims that are not covered by workers compensation laws.
A mutual insurer established by a state’s legislature to write workers compensation insurance for any qualified employer in the state.
An employer’s liability for its employees’ operation of their autos in the employer’s business.
A condition in which one person agrees to provide services for another in return for wages or some other form of consideration.
A legal doctrine under which an employer may terminate any employee at any time for any reason or for no reason.
Professional liability insurance which covers the insured organization and its directors, officers, and liability (EPL) insurance employees for employment-related claims that are specifically excluded from CGL policies.
Liability based on claims made by employees or job applicants against employers for wrongful employment practices such as harassment, discrimination, wrongful termination, violation of civil rights, and failure to enforce adequate and consistent company policies.
Insurance that covers an organization, its directors and officers, and its employees against claims alleging damages because of wrongful employment practices such as sexual harassment, wrongful termination, and unlawful discrimination.
The endorsement that eliminates coverage under the CGL coverage form for bodily injury or personal and advertising injury to a person arising out of various wrongful acts or omissions related to the person’s employment.
The distribution of authority, resources, information, and accountability to employees in an organization in order to make decisions and to solve problems.
An objective that defines the skills, knowledge, or abilities learners must achieve in order to successfully complete terminal objectives.
The process of translating a message into words.
The consequence of a failure mode on the operation, function, or status of the highest indenture level.
An ultimate customer, the user of the final product or service.
A document that amends an insurance policy.
An approach to accident causation that views accidents as energy that is released and that affects objects, including living things, in amounts or at rates that the objects cannot tolerate.
An analysis of the flows or transfers of energy within an existing or proposed system—or between a system and an environment—checking for hazardous accumulations or escapes of energy.
A contract between an accountant and a client regarding the services to be performed by the accountant and the terms of that service.
An approach to risk control that involves attack by design and location of properties and equipment to reduce the number of physical hazards.
The element of a catastrophe model that uses the information from the science component to estimate the extent of structural damage that would occur based on a simulated catastrophic event.
A phase in the life of a system when the system’s design is constructed and prototypes are tested.
The loss attributable to a subsequent peril that results from loss by an initial peril.
A financial account for government operations financed and operated similarly to private business enterprise.
An expanded liability concept requiring each member of an industry responsible for manufacturing a harmful or defective product to share liability, when a manufacturer at fault cannot be identified.
An approach to managing all of an organization's key business risks and opportunities with the intent of maximizing shareholder value. Also known as enterprise-wide risk management.
The entity (partnership or corporation) purchases life insurance on the lives of the owners; the entity uses the proceeds to purchase the deceased’s interest in the business.
Coverage extension of D&O liability policies for claims made directly against a corporation (the “entity”) for wrongful acts covered by the policy.
A buy-sell agreement to which the owners and the business entity are party and under which the business entity agrees to purchase the business interest of a deceased, disabled, or retired owner.
The second level of a top-down review of internal controls that helps ensure that management directives relative to the entire entity are in place and are being carried out.
A measure of disorder in a dataset.
A product that is brought into the U.S.
A complex, interconnected set of relationships and systems involving all living things and their surroundings.
Any hazardous condition beyond the control of the property owner that might give rise to a covered loss.
Site-specific form of pollution liability insurance
The body of law that deals with the environment’s maintenance and protection.
An insurance policy that provides essentially the same coverage as a traditional engineers professional liability policy, but without a pollution exclusion.
The process of (1) identifying factors that are crucial for an organization's success or failure in the marketplace, (2) defining signals or events that affect the factors, and (3) determining the implications of the signals or events.
The point on the earth’s surface directly above the earthquake focus.
Legislation that prohibits discrimination on the basis of gender, marital status, race, color, religion, national origin, age, or an applicant's receipt of public assistance.
A part of the Fourteenth Amendment to the U.S. Constitution prohibiting state laws that discriminate unfairly or arbitrarily, and requiring equal treatment to all persons under like circumstances and conditions.
A long-term reserve amount established by an insurance or reinsurance company to pay for insured losses in the event of a future catastrophe, such as a flood or an earthquake. The equalization reserve is in addition to the (re)insurer’s reserves for incurred losses from known events, including catastrophes.
Insurance that covers loss due to the accidental breakdown of almost any type of equipment that operates under pressure or that controls, transmits, or uses mechanical or electrical power.
Form that covers the stock in trade of dealers that sell agricultural or construction equipment and customers’ equipment in the insured’s care, custody, or control.
A category of inland marine policies covering various types of equipment, wherever it may be located in the policy period.
Statutes adopted by states to apply to marital property in the event of a divorce; the appropriate court can divide a divorcing couple’s marital property between the parties in an “equitable manner” according to factors specified in state domestic relation law, regardless of how title to the property is held.
A court-ordered remedy form used in cases in which the plaintiff seeks an injunction or specific performance from the defendant instead of monetary damages.
A right of subrogation that arises out of common law.
The surety’s recovery of its bond loss payments from a third party.
Fairness, or a body of principles constituting what is fair and right.
Preferred stock, surplus, common stock, undivided profits and capital reserves, and net unrealized holding gains (or losses) on securities that are not available for sale.
A portfolio diversification or hedging strategy consisting of the simultaneous purchase of put and call options on particular stocks for certain time periods.
An annuity contract in which the investment performance of the annuity is linked to the performance of an outside group of securities, such as the S&P 500 Index.
A ratio that emphasizes the efficiency of the company's use of debt to finance its assets.
The risk that changes in the price of a stock or another security will increase or decrease.
A security used by a corporation to raise funds by granting stockholders an ownership share in the corporation.
An article that is substantially identical. The replacement feature of the personal articles floater allows an insurer to settle a loss by providing an item of equivalent property.
The physical stress on joints, bones, muscles, and nerves and the stress created by environmental factors such as lighting, glare, noise, color, and temperature.
The science of designing work space and equipment based on the needs of the people who use the work space and equipment.
Negligent acts (errors) committed by a person conducting insurance business that give rise to legal liability for damages; a failure to act (omission) that creates legal liability.
An insurance policy covering liability for the mistakes (errors) and failures to act (omissions) of professionals and businesspeople, including insurance producers.
An other-insurance provision that relieves the insurer of any obligation to pay a claim for which other insurance applies.
The act of obtaining confidential information through personal observation or mechanical, digital, or electronic techniques that circumvent efforts to protect the information’s confidentiality.
The sum total of all types of property owned by a person at the time of death, including businesses, profits, savings accounts, stocks, and other financial assets.
A landlord-tenant estate created for a definite period.
Making arrangements for efficiently transferring an estate, during the person’s lifetime or at death, to another person, other persons, or other entities.
A decrease in an estate’s value resulting from paying creditors’ claims, estate administrative costs, and taxes, as required to settle the estate.
A tax imposed on the transfer of property at death.
Rate development factors used for operations with unique characteristics or for which inadequate statistical experience exists. ELPs are multiplied by loss cost multipliers to develop rates.
A legal principle that prohibits a party from asserting a claim or right that is inconsistent with that party's past statement or conduct on which another party has detrimentally relied.
The study of what constitutes good and bad behavior, dealing with moral duty and obligation.
The chair of the Board of Ethical Inquiry (BEI) who receives written complaints of ethical violations, investigates the complaints and presents the facts to the BEI for consideration, and communicates BEI recommendations to the Ethics Policy Committee of the Board of Trustees of the American Institute For CPCU and delivers the verdicts.
A committee of the Board of Trustees of the American Institute that reviews matters of policy relating to American Institute ethics activities and promulgates the specific disciplinary procedures and penalties to be used in enforcing the Code.
Short for etiology, which is the causes of disease, including insufficient blood supply and physical agents, such as trauma, radiant energy, and chemical agents acting locally or inserted into the wrong tissues.
A long-term debt instrument that is denominated in U.S. dollars or another currency and that is offered and issued outside the issuer’s country of origin.
An independent advisory body to the European Parliament, the Council of the European Union, and the European Commission with responsibilities to support the stability of the financial system and transparency of markets and financial products and to protect insurance policyholders, pension-scheme members, and beneficiaries.
An occurrence or series of occurrences that causes a change in a resource’s value or level.
A horizontal flowchart that shows the chronological sequence of events and facts leading to a problem situation.
Insurance that covers loss of business income and extra expenses resulting from the cancellation, interruption, postponement, rescheduling, or abandonment of a specified event.
The information presented at trial by way of witnesses, records, documents, exhibits, or other concrete objects to persuade the court or jury to believe the arguments of the opposing parties.
A requirement by a life insurer that the insured demonstrate that he or she still meets the insurer’s underwriting standards. The insured is usually required to submit a medical questionnaire or have a physical examination to show that he or she is in good health.
A regulatory approach that emphasizes the use of objective measures of costs and benefits in setting regulatory policies.
Selling terms under which the seller's price includes all transportation and insurance charges necessary to deliver the goods to the dock at the named port of importation, with import duty paid.
Selling terms under which the seller's price includes all transportation and insurance charges necessary to deliver the goods to the dock at the named port of importation, with import duty paid.
Contacts in which only one party is heard.
Selling terms under which the buyer agrees to take delivery of the goods at the point of origin specified in the contract.
An overstatement of values or types of losses.
A policy provision that indicates the insured's duty to permit a premium auditor representing the insurer to conduct the audits necessary to determine the final premium when the premium is based on an auditable exposure or to confirm the amount payable on a claim.
A statement given by a person who has sworn to tell the truth before an officer of the court.
A policy provision that excludes certain types of loss or certain causes of loss.
Persons or firms that place business with insurers not licensed (nonadmitted) in the state in which the transaction occurs but that are permitted (“eligible”) to write insurance because coverage is not available through standard market insurers.
Insurance coverages unavailable in the standard market that are written by nonadmitted insurers.
Insurance that covers losses above an attachment point, below which there is usually another insurance policy or a self-insured retention.
An other-insurance provision that specifies that the policy pays any remaining loss amount, up to its policy limits, after the primary policy's coverage limits have been exhausted.
The possibility that a jury award might exceed the insured’s limit of liability, exposing the insured’s personal assets.
A level of insurance coverage above the primary layer.
Financial responsibility that exceeds the limit of insurance coverage for a claim.
Insurance coverage for losses that exceed the limits of underlying insurance coverage or a retention amount.
A policy that covers liability claims in excess of the limits of an underlying policy or a stated retention amount.
A component of the retrospective rating insurance premium formula that compensates the insurer for the risk that an individual loss will exceed the loss limit.
A reinsurance agreement for individual loss exposures in which the primary insurer pays all losses up to its agreed retention and the reinsurer pays losses in excess of the retention up to the reinsurance limit.
A type of reinsurance in which the primary insurer is indemnified for the portion of each loss that exceeds a specified dollar amount.
A type of reinsurance in which the primary insurer is indemnified for losses that exceed a specified monetary amount.
A type of reinsurance in which the primary insurer is indemnified for losses that exceed a specified dollar amount.
Insurance that pays an amount over the primary layer of coverage.
A loss that results when an insured sues an insurer for failing to settle a claim within the insured's policy limits when the insurer had the opportunity to do so.
A reinsurance treaty clause that requires the reinsurer to indemnify the primary insurer for damages awarded against the primary insurer in favor of the insured because of the primary insurer's failure to settle a third-party claim against the insured by reason of bad faith, fraud, or gross negligence.
A jury award that exceeds an insured’s limit of insurance.
Uncertainty about an investment’s value because of potential changes in the exchange rate between currencies.
An investment fund that purchases assets and sells shares representing proportional ownership of the underlying assets, similar to a mutual fund. Unlike a mutual fund, an ETF’s shares are freely traded among investors, like any other publicly traded common stock.
The tax that is based on a privilege granted.
A policy provision that eliminates coverage for specified exposures.
A ratio for an annuity that is determined by dividing the cost basis by the expected return under the annuity. The result is the portion of each periodic payment that is excludible from income until the entire cost basis has been fully recovered.
The act of restricting land use either by prohibiting additional building or by requiring high standards.
The endorsement that deletes the subcontractor exception to the CGL coverage form’s Damage to Your Work exclusion, thereby eliminating coverage for damage to a subcontractor’s work or damage to the named insured’s work arising out of a subcontractor’s work.
An insurance marketing system under which agents contract to sell insurance exclusively for one insurer (or for an associated group of insurers).
An insurance marketing system under which agents contract to sell insurance exclusively for one insurer (or for an associated group of insurers).
An agent that has a contract to sell insurance exclusively for one insurer or a group of related insurers.
The control of only one person or entity; in tort law the control by the defendant alone of an instrument that caused harm.
Managed care plan that pays only for medical care received within the network of preferred providers.
The workers compensation law grants benefits as the employee’s sole source of recovery against the employer, so employees lose the right to sue their employers for injuries covered by workers compensation.
A contractual provision purporting to excuse a party from liability resulting from negligence or an otherwise wrongful act.
A vessel engaged in carrying passengers on trips lasting a full day or less for purposes of sightseeing, dinner, entertainment, observation of marine wildlife, or casino gambling.
A contract that has been completely performed by both parties.
The establishment of the formal contract between the surety, principal, and obligee that is offered to the principal.
A party, named in a will, who distributes and settles the deceased's estate as prescribed in the will.
A contract that has not been completely performed by one or both of the parties.
An organization with sufficient size and sophistication to be permitted to buy property, liability, and automobile insurance using rates and/or policy forms not filed with state insurance departments.
An employee who is paid a salary and who does not receive overtime pay.
The completion of all possible administrative procedures and appeals in a case; required before a party can appeal an agency action to a court.
A policy that covers property at exhibitions and while in transit to and from the exhibition site.
The removal of a duty.
The surety's right to require a principal to perform or post collateral when a loss is imminent.
A financial index derived from the income, assets, and other household information reported on the Free Application for Federal Student Aid used to determine a student's level of eligibility to receive federal, state, and institutional financial aid.
The loss ratio anticipated based on past loss experience or aggregate industry loss data.
A term that could mean reasonably foreseeable consequences.
The weighted average of all of the possible outcomes of a probability distribution.
Expenses incurred to speed up the repair or replacement of covered property.
Coverage for reasonable expenses the insured incurs to speed up the repair or replacement of covered property.
A flat charge designed to cover administrative expenses, such as policy issuance and record keeping, that are common to all policies.
An expense that increases or decreases in direct relationship to sales, such as cost of goods sold.
The factor, which represents the surety’s business costs, that is multiplied by loss costs to determine bond premiums.
An element in the gross rate that covers the insurer's underwriting expenses, profits, and contingencies.
A method used to estimate needed retirement income based on the total expenses anticipated in the first year of retirement.
An insurance rating plan that modifies the expense portion of an insured’s rate to reflect the actual cost of providing coverage to that insured.
The amount that is included in an insurance rate to cover the insurer's expenses and that might include loss adjustment expenses but that excludes investment expenses.
An insurer's incurred underwriting expenses for a given period divided by its written premiums for the same period.
The total expenses that a surety expects to incur for satisfying its performance, payment, and bid bond obligations.
Costs incurred by an insurer in writing insurance and servicing accounts.
Coverage for necessary expenses incurred by the named insured to reduce a business income loss; the expenses are covered only to the extent they actually reduce the business income loss.
Coverage for necessary expenses incurred by the named insured to reduce a business income loss; the expenses are covered only to the extent they actually reduce the business income loss.
A fund under a finite risk insurance plan that an insurer uses to share profit with the insured and whose amount is determined by adding the premium paid by the insured to the investment income earned and then subtracting the insurer’s margin and paid losses.
A rate multiplier derived from the experience rating computation.
A method of tailoring manual rates to an insured's experience based on the insured's payroll and loss record of certain prior years.
A factor that tailors manual rates to an insured's experience based on the insured's payroll and loss record of certain prior years.
The period for which all pertinent statistics are collected and analyzed in the ratemaking process.
The length of time available to collect loss costs.
A rating plan that adjusts the premium for the current policy period to recognize the loss experience of the insured organization during past policy periods.
A method of tailoring manual rates to an insured's experience based on the insured's payroll and loss record of certain prior years.
A rating plan that increases or reduces the premium for a future period based on the insured’s own loss experience for a period in the recent past.
A system that allocates costs to departments according to their pro rata portion of past losses.
A software program that duplicates the decision-making process.
A method of setting reserves with a software application that estimates losses and loss adjustment expenses.
Computer software programs that supplement the underwriting decision-making process. These systems ask for the information necessary to make an underwriting decision, ensuring that no information is overlooked.
A statistical model that displays the specific relationship among independent variables and the dependent variable.
The definitions, symbols, and abbreviations appearing in the Classification Table of the Commercial Lines Manual that orient the user to the content.
See Independent variable.
Options that customers are aware of and can select.
An approach to identify (as opposed to verify) systematic patterns and relationships among variables without any prior expectations that such relationships exist.
A set of techniques that use graphs and descriptive statistics to explore the structure of a dataset and identify outliers.
A well that is drilled to determine whether an oil or a gas deposit is at the drilling site and how productive it may be.
Any violent expansion of gases into the atmosphere.
A method of loss trending that assumes a fixed percentage increase or decrease for each time period.
A list of coverages or classes of business that can be “exported” (written in the surplus lines market) without fulfilling the diligent search requirement.
Nonadmitted package policy tailored to organizations with incidental exposures in countries other than their home country.
Any condition that presents a possibility of gain or loss, whether or not an actual loss occurs.
A variable that approximates the loss potential of a type of insurance, such as gross sales or payroll.
A metric used to identify risk inherent to an organization’s operations.
An approach to reinsurance treaty pricing that considers the amount of liability inherent in the type of business covered by the treaty being priced.
Under the exposure rule, an occurrence takes place at the time of the first exposure to damage-producing elements.
The resources, events, and impact at each risk owner’s level.
A three-dimensional representation of resources, events, and impacts that is used as a risk assessment tool.
A fundamental measure of the loss exposure assumed by an insurer.
The insured’s property or location covered by the policy.
The unit of measure (for example, area, gross receipts, payroll) used to determine an insurance policy premium.
A system that allocates costs to departments on the basis of their exposures, regardless of their loss experience.
The authority that the principal specifically grants to the agent.
A contract whose terms and intentions are explicitly stated.
The oral or written permission to enter onto another’s land to do a certain act, but not the granting of any interest in the land itself.
A statement relinquishing a right that arose because of a breach of contract.
Warranties in written form in an insurance policy.
An explicit statement about a product by the seller that the buyer or other user may rely on and that provides a remedy in the event the product does not perform as claimed.
Coverage for business income losses that continue after the period of restoration ends; the coverage begins when the damaged property has been restored and ends when the insured’s business returns to normal, subject to a maximum of sixty days.
A specified period following the cancellation of a commercial crime policy; if discovered by the insured during this period, a loss that occurred before the cancellation date will be covered under the canceled policy.
An optional coverage that lengthens the duration of the extended business income (EBI) additional coverage for up to two years.
An optional coverage that lengthens the duration of the extended business income (EBI) additional coverage for up to two years.
An additional period (also called a “tail”) following the expiration of a claims-made policy, during which the expired policy will cover claims first made for injury or damage that occurred on or after the policy’s retroactive date (if any) and before policy expiration.
A standard that uses tags for metadata in a web document.
A ratemaking technique that uses rating-related data elements in order to individually recalculate past coverages using current rates.
The action fire departments and other public facilities take to safeguard the general public, including organizations, from hostile fire.
A review of claim files conducted by organizations other than the insurer that involves reviewing overall claims handling practices; reviewing reserves and other technical details of claim settlements; investigating consumer complaints; ensuring that claims procedures were followed; and verifying that appropriate, thorough documentation was included.
A person from outside of the organization who receives outputs.
Data that belongs to an entity other than the organization that wishes to acquire and use it.
Data that is generated outside of the organization that wishes to use it.
A loss exposure outside the area owned or controlled by the insured.
A property outside the area owned or controlled by the insured that increases the probability of loss to the insured’s building and its contents.
A loss exposure outside the area owned or controlled by the insured.
Insurance coverage for extra expenses incurred by the named insured to avoid or minimize the suspension of operations resulting from direct damage caused by a covered cause of loss.
Form that covers extra expenses incurred by the named insured to avoid or minimize the suspension of operations resulting from direct damage caused by a covered cause of loss.
Expenses, in addition to ordinary expenses, that an organization incurs to mitigate the effects of a business interruption.
A payment awarded by a court that exceeds the usual contract damages for a breach of contract.
Damages awarded to the insured as a result of the insurer's improperly handling a claim.
An insurer’s obligation that goes beyond the terms of a contract.
Damages awarded against the primary insurer in favor of the insured as a result of the primary insurer’s bad faith, fraud, or gross negligence in handling a claim.
A reinsurance treaty clause that requires the reinsurer to indemnify the primary insurer for extra-contractual damages awarded against the primary insurer in favor of the insured because of the primary insurer's bad faith, fraud, or gross negligence in handling a claim.
The extraction of data from multiple sources, transformation of the data so it conforms with the organization's needs and standards, and loading of the data into an accessible database or data management system.
A CLM vehicle size classification for trucks with a gross vehicle weight (GVW) of over 45,000 pounds.
A CLM vehicle size classification for truck-tractors with a gross vehicle weight (GVW) of over 45,000 pounds.
Coverage provided by a workers compensation statute for an employee who is injured while temporarily working in a state other than the state of hire.
A provision of a workers compensation statute that extends protection to an employee who is injured while temporarily working in a state other than the state of hire.
Statistical probability estimations of extreme deviations from the median of probability distributions.

F

Classifications that describe freight handling, stevedoring, or other operations inherently subject to LHWCA jurisdiction.
An examination to detect arthritis in the hip. With the patient lying on the back, a knee is flexed with the outside ankle resting on the knee of the opposite leg and the knee depressed. Pain indicates arthritis in the hip. Alternatively referred to as Patrick’s Test.
The death benefit provided under the policy.
A bond’s original value and the amount that will be paid at the bond’s maturity date.
The value of the death benefit provided under a life insurance policy.
The smooth areas of the cervical vertebrae for articulation with the ribs.
A physical condition characterized by symptoms that result from an unconscious psychological need to be sick.
A bailee entrusted with possession of another’s goods for sale on commission.
A statistical approach used to analyze interrelationships among a large number of variables and to explain these variables in terms of their common underlying dimensions (factors). Information contained in the original variables is condensed into a smaller set of factors.
The elimination of an element in an analysis because of its negligible effect on the calculation or because it represents an uncharacteristic event that is unlikely to recur.
Selling a company's accounts receivable at a discount.
A document that assigns a firm's entire inventory to a financial institution as collateral for a loan.
Mutual insurance companies originally formed by textile manufacturers to obtain lower rates for their mills; HPR insurers
A situation in which a party experiences an economic advantage if an insured event does not occur or, conversely, economic harm if the event does occur.
An agreement that defines the terms of the facultative reinsurance coverage on a specific loss exposure.
Reinsurance of individual loss exposures in which the primary insurer chooses which loss exposures to submit to the reinsurer, and the reinsurer can accept or reject any loss exposures submitted.
The manner in which a perceived or actual defect in an item, process, or design occurs.
An analysis that reverses the direction of reasoning in fault tree analysis by starting with causes and branching out to consequences.
An insurance pool through which private insurers collectively address an unmet need for property insurance on urban properties, especially those susceptible to loss by riot or civil commotion.
The credit legislation that applies to suretyship.
The price at which a property would change hands on the open market between a willing buyer and a willing seller (also referred to as market value).
The amount that a willing and able buyer would pay for the principal's assets or the amount that the principal's creditors would accept in satisfaction of the principal's liabilities in the short term.
An insurance pool through which private insurers collectively address an unmet need for property insurance on urban properties, especially those susceptible to loss by riot or civil commotion.
Under Coverage D—Loss of Use of a homeowners policy, the amount of rent (less any discontinued expenses) that the insured would have received for the residence or any part of the residence rented to another individual for residential purposes if the residence had not been damaged.
Coverage for losses that arise when the insured's rental property, whether rented or not, has been damaged and is no longer available for rental.
The right to use copyrighted material in a reasonable manner without the copyright owner’s consent.
The market value, either actual or estimated, of an asset or a liability.
An officeholder’s high standard of conduct in fulfilling official duties.
The seizure or forcible restraint of a person without legal authority.
The restraint or confinement of a person without consent or legal authority.
The endorsement that deletes the False Pretense exclusion from the ADCF and agrees to pay for loss as a result of the named insured’s (1) being tricked into voluntarily parting with an auto or (2) acquiring an auto from a seller who did not have legal title.
Any false material statement of fact as to an insurer’s financial condition, knowingly made.
A person who is related to the claimant and is a resident of the claimant’s household.
A liability concept that holds the owner of an automobile kept for the family’s use vicariously liable for damages incurred by a family member while using the automobile.
Farm coverages, including property and liability, with a discount on the property coverage
Liability coverage including commercial and personal liability similar to the CGL and homeowners policies
Property coverage similar to homeowners coverages A through D of a homeowners policy, although differences exist between that policy and the farm form.
A package policy consisting of residential insurance and commercial property and liability insurance, with some special provisions to cover loss exposures unique to farms.
See Free alongside vessel.
An analysis that takes a particular system failure and traces the events leading to the system failure backwards in time.
A warranty that excludes loss caused by war, piracy, virtually any lawful or unlawful taking of the vessel, a nuclear weapon, a mine, or a torpedo.
Federal statute that provides workers compensation benefits for nonmilitary employees of the federal government.
Federal statute that allows employees of interstate railroads or their survivors to sue their employers for occupational injuries or death that result from the employer’s negligence.
A tax imposed on premium payments to offshore insurers.
A reinsurance treaty clause that states that the primary insurer is responsible for administering and remitting the federal excise tax levied against alien reinsurers party to the treaty.
The arm of the Federal Emergency Management Agency (FEMA) that manages the NFIP through the administrative services of a private contractor.
A statute that prohibits the use of the U.S. Postal Service for the purpose of defrauding or obtaining money or property by means of a false or fraudulent pretense, representation, or promise.
A classification of bond that is required for some public officials in federal offices.
A federal bond that is required to provide postal service in an area without a post office.
A reduction in construction loan rates to stimulate rural residential development.
The agency that enforces compliance with the Fair Credit Reporting Act.
Grants to commissions, corporations, and groups that coordinate the use and disbursement of funds to subsidize the construction of low-rent apartments.
A certificate granted to warehouse owners and grain elevator owners who comply with the objectives of the Warehouse Act.
A procedure in which bills from healthcare providers are analyzed to ensure that proper items of service are being billed and that charges for services are appropriate.
An independent contractor who specializes in loss control work and who is paid for each loss control survey performed.
Controlling healthcare provider fees by negotiating discounts, developing billing guidelines, and auditing medical bills.
A list of the maximum allowable charges for reimbursement to medical providers.
A full ownership interest in property with the unconditional right to dispose of it.
The information the receiver sends back to the sender in the communication process.
A commercial facility that fattens a farmer’s animals and then markets them for slaughter at the best possible time.
A specialized type of livestock coverage that covers animals while in the custody of a commercial feedlot operator.
A payment arrangement under which a healthcare provider sets its fee and the insurer or patient pays the fee after the service is rendered.
A common-law defense to negligence used by employers in tort suits brought by injured employees who sustained injuries during the course of business from the act or omission of a fellow employee.
A worker of the same rank as the injured worker.
Any claim or suit brought against the insured by a fellow employee who sustains injuries during the course of business because of the insured's acts or omissions.
The thighbone, which bears the weight of the entire upper body.
An extension of a fire wall through an outer wall.
A complication in a healing fracture that occurs when the callus fails to harden.
The long, slender bone on the outside of the lower leg.
Bonds that historically have guaranteed the honesty of employees. Fidelity bonds have been replaced by employee dishonesty coverage (insurance).
A dishonest act that occurs when an employee in a position of trust willfully violates that trust.
A person or entity that holds a position of trust, manages another person’s or entity’s affairs or funds, and has a duty to that person or entity to act in a trustworthy manner.
A court bond guaranteeing that a person appointed by a court to administer the property or interests of others will faithfully perform his or her duties.
The duty to act in the best interests of another.
A financial account set aside by a fiduciary entrusted with the duty of caring for the assets of another based on trust and confidence.
Insurance that covers the fiduciaries of an employee benefit plan against liability claims alleging breach of their fiduciary duties involving discretionary judgment.
The obligation to perform duties faithfully, carefully, and diligently.
An audit conducted by a premium auditor at the insured's office or at the insured's CPA's office.
An inspection of an insured’s business operation to ensure that accurate information was supplied on the insurance application or that the premium is adequate for the operation.
An insurer's employee who handles claims that are best handled in person; much of the field claims representative's time is spent visiting the scene of a loss; interviewing witnesses; investigating damage; and meeting with insureds, claimants, lawyers, and other persons involved in the claim.
An inventory valuing method that assumes that the first items purchased are the first items sold.
A type of trailer hitch designed for pulling heavy trailers. The gooseneck hitch on the trailer connects to a plate mounted on the towing vehicle on which the hitch can pivot during a turn.
An insurance rating law in which the insurer must file rates and supporting rules with the state insurance department prior to their use, but the rates can then be used immediately without specific approval.
A written document that summarizes activity on a claim that is open beyond a certain time period.
A type of insurance rate regulation in which the insurer must file rates and supporting rules with the insurance regulator within a specific number of days prior to their use, and if not disapproved by the regulator during that review period, the rates can then be used immediately without specific approval.
An insurance rating law in which the insurer must file rates and supporting rules with the state insurance department prior to their use, but the rates can then be used immediately without specific approval.
The classes of inland marine business for which policy forms and/or rates must be filed with the state insurance department.
Forms and/or rates that must be submitted to state insurance departments for approval; these forms are usually standardized and published by an advisory organization.
The classes of inland marine business for which forms and/or rates must be filed with the state insurance department.
The election of an income tax rate filing schedule from one of five individual taxpayer categories, based on family status.
Form that covers exposed motion picture film and magnetic tapes or videotapes, including related soundtracks or sound records.
Expenses before death, including health care and funeral expenses.
An administrative agency’s final conclusion or disposition of any material private right of a party, terminating an agency proceeding.
The price per exposure unit determined by adjusting the prospective loss costs for expenses, profits, and contingencies.
A discipline concerned with determining value and making decisions about money, banking, credit, investments, and other assets.
The process used to prepare financial statements for use by both external and internal parties.
A profitability ratio that indicates whether an insurer has made an underwriting loss or gain; calculated by dividing incurred losses and incurred expenses by earned premiums.
A profitability ratio for an insurer that relates underwriting expenses to earned premiums.
For noninsurance entities, a firm’s net worth; for an insurer, the amount of its policyholders’ surplus.
An analysis of an insurer's operations and financial condition to determine if the insurer meets the financial requirements to sell insurance in a particular state.
A policy that covers the crime loss exposures of financial institutions such as banks, savings and loan institutions, and insurance companies.
An entity that obtains money from one source and redirects it to another.
The use of fixed cost funds (debt) to increase returns to shareholders.
The effective management of assets, liabilities, capital structure, revenues, and expenses.
A mechanism used for trading securities.
A plan to accumulate assets whether or not a loss occurs, as opposed to an insurance plan that pays only if a loss occurs.
Individuals who provides financial planning advice, analysis, and services to others on a business or personal basis.
A report that presents an organization's financial position.
Law enacted to ensure that motorists have the financial ability to pay for any property damage or bodily injury they might cause as a result of driving or owning an auto.
Uncertainty about the future investment returns of a given asset because of the amount of debt of the organization on which the investment is based.
A document that quantitatively presents an organization's financial activities or status.
Direct or indirect financial assistance to a principal to facilitate completion of the obligation.
The filed public notice to perfect, or legally establish, a creditor's rights under the Uniform Commercial Code Section (UCC).
A risk financing plan that transfers a limited (finite) amount of risk to an insurer.
A nontraditional type of reinsurance in which the reinsurer's liability is limited and anticipated investment income is expressly acknowledged as an underwriting component.
The rapid oxidation of combustible material, releasing heat and flame. Without flame, there is no “fire,” for insurance purposes.
A factor used to calculate the public protection classification for a municipality; considers the adequacy of the telephone system, devices used to record calls that report fires, number of operators on duty to handle fire calls, fire radio communication facilities, and emergency power equipment.
Insurance that covers direct damage to or loss of insured property.
A private or temporary organization of individuals equipped to fight fires; typically used in businesses that are located far from municipal fire services.
Measures and equipment used to detect fire and alert the fire service when a fire breaks out.
A section of a structure so well protected that fire cannot spread from that section to another, or vice versa.
A door made of fire-resistant material that can be closed to prevent the spread of fire.
The legal liability for fire damage to premises rented to or occupied by the insured and for which the insured is responsible.
Coverage for the insured's liability for fire damage to premises rented to or temporarily occupied by the named insured.
The expected maximum amount of combustible material in a given area of a building, including both structural elements and contents, commonly expressed in terms of weight of combustibles per square foot.
A divider that is less strong than a fire wall and does not create separate fire divisions but can reduce the spread of a fire.
Measures taken to reduce the likelihood of fire.
Measures taken to protect lives and property from fire damage; consists of prevention, detection, and suppression.
The ability of a building or material to withstand the effects of or give protection from fire.
The risk control measures used to protect people and property from the adverse effects of hostile fires.
A factor used to calculate the public protection classification for a municipality; considers the number, types, and geographic distribution of fire engine companies and equipment, as well as fire ­personnel training.
Measures and equipment used to contain and extinguish a fire.
A scoring system used to evaluate public fire protection; contains two major sections, Public Fire Suppression and Individual Property Fire Suppression.
A useful analytical tool whose three sides represent the required elements of a fire—fuel, heat, and oxygen to support combustion.
A floor-to-roof wall made of noncombustible materials and having no open doors, windows, or other spaces through which fire can pass.
A floor-to-roof wall made of noncombustible materials; openings in the wall, if allowed, must be protected.
A closed container that is heated by the direct fire of burning fuel and can withstand internal pressure.
A rating given to a building that indicates the resistance of the building to collapse or to total involvement in a fire.
A class of construction that has exterior walls, floors, and roofs of masonry or other fire-resistive material with a fire-resistance rating of at least two hours.
A safe designed principally to protect money and valuable records from fire damage.
The price received for an asset that has to be liquidated (sold) immediately.
An element of construction inserted in a concealed space (wall or roof area) that prevents the passage of flame from one point to another; used to help contain fires and increase the chance of extinguishing the flames.
The person or organization whose name appears first as the named insured on a commercial insurance policy; this person or organization is usually responsible for paying premiums and has the right to receive any return premiums, to cancel the policy, and to receive the notice of cancellation or nonrenewal.
The insured in an insurance contract.
A notification submitted by an employer to the state workers' compensation agency when an injury to an employee is identified.
A settlement made upon the first contact with claimant.
The insurer’s mishandling of a first-party claim that can result in extracontractual damages.
A lawsuit brought against an insurer by an individual insured or third-party claimant under a state unfair claim settlement practices act.
A demand by an insured person or organization seeking to recover from its insurer for a loss that its insurance policy may cover.
An analytical tool that records all possible causes of problems that a group can think of during a brainstorming session to find and treat root causes of problems.
The relationship between the nominal rate of return and the real rate of return.
A method of evaluating the external environment in which a company operates. Involves assessing five forces that drive competition: threat of new entrants, threat of substitute products or services, bargaining power of buyers, bargaining power of suppliers, and rivalry among existing firms.
A stipulation that when a qualified retirement plan beneficiary is not a designated beneficiary, the decedent’s entire interest in the plan must be distributed to all beneficiaries (designated or not) by the end of the fifth year following the year of the participant’s death.
An annuity contract under which the issuing insurer guarantees interest at a rate no less than that specified in the contract and guarantees the cash value of the contract against loss.
Resources that cannot be expected to be sold or consumed within the business's normal operating cycle and that are usually considered to be long lived.
An activity ratio that measures the number of times that sales of the year cover net property, plant, and equipment; uses balance sheet and income statement data and is calculated by dividing sales by average net property, plant, and equipment.
A business that performs any of a wide range of aircraft-related operations, such as sales, service, or rental of aircraft.
Statutorily required financial requirements ensuring that applicants seeking licenses to conduct insurance business within a state's jurisdiction have sufficient capital to support underwriting activity.
A leverage ratio that indicates the number of times interest on borrowed funds, lease obligations, and other fixed obligations is earned in a year and that indicates the debt-paying ability of the company; uses income statement data and is calculated by adding EBIT and other fixed charges then dividing by the interest charges plus other fixed charges.
Expenses that remain the same, in the short term, regardless of the amount of business an insurer writes.
Costs that do not change when the quantity of output changes during a particular time period.
An annuity that is purchased over time, usually with fixed equal premiums paid in monthly or annual installments.
A loan for financing or refinancing debt that is secured by fixed assets.
The market for P&I insurance as offered by conventional insurance companies, which charge a fixed premium at policy inception that cannot be changed without the assured's consent.
An agreement that specifies the amount the contractor will receive for performing and completing the contract.
Any personal property affixed to real property in such a way as to become part of the real property.
A detector that sounds an alarm in the presence of visible or invisible radiant energy.
The speed with which a gas fire consuming an interior construction material or finish material spreads, as determined in a test environment; one factor used to develop fire rating.
The lowest temperature at which a combustible liquid releases vapors that can be ignited by a spark or flame.
Tin, aluminum, copper, or other resistant material strip that is used to seal joints or other breaks on a roof surface such as chimneys, parapet walls, and skylights.
A stage in the development of a contained fire in which all exposed surfaces reach ignition temperature at approximately the same time, causing fire to spread rapidly throughout the space.
The cancellation of an insurance policy as of its effective date.
A ceding commission that is a fixed percentage of the ceded premiums.
A deductible stated in a specified dollar amount.
A constant price charged for additional mortality risk.
A fee arrangement in which the attorney agrees to handle the case from start to finish for a specified amount.
A property insurance policy without a coinsurance clause.
A fixed rate that is not adjusted for losses occurring under the reinsurance treaty and that is applied to the primary insurer's prospective premiums.
A CLM commercial auto classification that applies to a policy that insures five or more self-propelled autos under one ownership.
A computer-based electronic vehicle monitoring system that provides information about vehicles' use and locations.
An insurance rating law under which prior approval is required only if the new rates exceed a certain percentage above (and sometimes below) the rates previously filed.
A type of insurance rate regulation that requires insurers to obtain prior regulatory approval only if new rates exceed a certain percentage above or below previously filed rates.
An insurance rating law under which prior approval is required only if the new rates exceed a certain percentage above (and sometimes below) the rates previously filed.
A budgeting method that allows budget adjustments to be made throughout the budgetary period in response to new developments.
An annuity with no predetermined premium amount or required payment frequency.
The bending of a joint.
In the context of cash management, the dollar value of the time interval between when a payment is made and when the recipient has use of those funds.
A policy designed to cover property that floats, or moves, from location to location.
A floating structure whose main purpose is to raise a vessel above the water so that the vessel's hull will be accessible for maintenance or repair work.
A type of vessel that can be used as an alternative to a fixed production platform to pump oil out of a production well, store the oil temporarily, and discharge the stored oil into a tanker for transportation from the production site.
A debt instrument that pays interest at a rate that is indexed to the rates on U.S. Treasury securities or other money market instruments.
A rising or overflowing of water onto what is normally dry land.
A temporary map designed to identify flood-prone areas in the community.
A map that shows exact boundaries for special flood hazard areas, the various flood zones, and base flood elevations.
Form that covers merchandise that is being held for sale and that the dealer has financed under a floor plan.
Financing for the purchase price of goods for resale to third parties.
A diagram that graphically and sequentially depicts the activities of a particular organization or process.
A chemical foam system that is used in outside areas to smother a fire.
Coverage, usually added to cargo policies by endorsement, that protects the assured/seller against cargo loss occurring during transit between the assured's premises and the vessel, when the cargo has been sold free on board (FOB) or free alongside vessel (FAS).
See Free on board (FOB) destination.
See Free on board (FOB) place of shipment.
See Free on board (FOB) point of origin.
See Free on board (FOB) vessel.
A small group of customers or potential customers brought together to provide opinions about a specific product, service, need, or other issue.
A business-level strategy through which a company focuses on one group of customers and offers a low-price product or service.
A business-level strategy through which a company focuses on one group of customers and offers unique or customized products that permit it to charge a higher price than that of the competition.
An excess liability policy that covers a claim in excess of the underlying limits only if the loss is covered by the underlying insurance.
A policy that tracks the primary insurance in all aspects
Reinsurers that take a percentage of the treaty's liability on the same terms and conditions as the lead reinsurer.
The act of giving up or the promise to give up a legal right.
A contract provision that protects parties who cannot perform contractual obligations because of causes outside their control.
An estimate of some future value, amount, or quantity calculated by mathematical techniques or determined by intuition.
The projection of a company’s future operating results or financial condition based on historical and current information.
A legal proceeding to terminate a mortgagor’s interest in property; the mortgagee’s remedy when the mortgagor defaults on payments.
A debt instrument issued by a corporation or government outside its own country.
A corporation formed in a state other than the state in which the corporation is doing business.
Insurance that protects a seller of goods in international trade against (1) a foreign buyer's failure to pay because of insolvency or other commercial reasons and (2) a foreign buyer's inability to pay because of the political intervention of the buyer's government.
A global-market entry method involving owning or controlling assets in a foreign country.
The risk that a change in the relative value of a foreign currency as compared to the currency used for the entity's financial statements will adversely affect the business operations of the organization.
An insurer licensed to operate in a state but incorporated in another state.
An insurer licensed to operate in a jurisdiction but incorporated in another jurisdiction.
A company’s purchase of foreign stocks, bonds, or other financial instruments.
An organization that U.S. law permits export-intensive corporations to create in order to reap tax benefits from exports.
Coverage that insures employees who are working outside the U.S. and who are not subject to a workers compensation law for benefits equal to those provided under either the workers compensation statute of a specified state or a specified federal compensation act.
An expert at evaluating business income losses.
A person who examines the physical facts and then uses these facts to estimate the speed and direction that vehicles were traveling. Their opinions are used when a claim is disputed to help determine which driver was liable.
A component of the rehabilitation process in which objective medical, psychological, or vocational evidence to use as expert testimony or evidence is developed in litigating an insurance claim.
A rule used to determine proximate cause when a plaintiff’s harm is the natural and probable consequence of the defendant’s wrongful act and when an ordinarily reasonable person would have foreseen the harm.
The natural probable consequences in a chain of events. It focuses on whether a prudent person knew or should have known that the consequences would occur.
A bid bond that requires the principal and the surety, jointly and severally, to pay to the obligee the total amount of the bid bond irrespective of the obligee's damages.
Signing the name of another person with intent to deceive.
The act of creating or presenting false documents or artwork as genuine in order to commit fraud.
The commercial crime insuring agreement that covers loss sustained by the insured because of forgery or alteration of checks, drafts, promissory notes, or similar written instruments.
An annual report that contains financial statistics, supplemental statements, and a narrative section (management’s discussion and analysis); required by the Securities and Exchange Commission (SEC) of all publicly traded companies to update their registration statement.
A composite form that describes the bond terms and requests information needed for three separate bond obligations.
A standard P&I form used in the American fixed-cost market; its main difference from form SP-38 is that form SP-23 includes cargo liability coverage, whereas SP-38 does not.
A standard P&I form used in the American fixed-cost market; its main difference from form SP-23 is that form SP-38 does not include cargo liability coverage, whereas SP-23 does.
An evaluation conducted during training for diagnostic purposes with the goal of improving the training.
A text file format that uses specified columns.
A method of setting claim reserves by using a mathematical formula.
An event occurring by chance.
A loss that is accidental and unexpected.
The jurisdiction or place in which a party sues.
The legal strategy of using the significant contacts rule to seek jurisdictions that offer the most favorable substantive law.
The state in which a party sues.
A contract that obligates one party to buy and another party to sell a specific financial instrument or physical commodity at a specified future date and price.
All of a building below the first floor level, including the masonry substructure that extends below ground level.
Warranties that restrict the covered perils applicable to particular average.
An exceptive warranty that excludes particular average unless the loss is actually caused by the stranding, sinking, or burning of the vessel or its collision with another vessel.
An exceptive warranty that excludes particular average unless the carrying vessel has been stranded, sunk, burnt, or in collision with another vessel, regardless of whether the loss was actually caused by one of these perils.
A class of construction that has load-bearing components made of wood or other combustible materials such as brick or stone veneer.
Earthquake-resistant construction that relies on the resilience of steel or specially designed reinforced concrete to absorb energy while undergoing considerable distortion and return to their original shapes.
The work done by carpenters to erect the basic skeleton of a house.
A class of construction that has load-bearing components made of wood or other combustible materials such as brick or stone veneer.
A structure, including elements such as concepts, methods, procedures, and metrics, that supports the risk management process.
An approach to project planning and execution in which portions of the project are divided by requirements or problem statements and addressed separately, but in a way that will integrate.
The structural members that form the skeleton of a building.
A type of deductible whereby the policy does not pay any loss unless the loss exceeds a flat dollar amount or a given percentage of the amount of insurance, but, if the loss exceeds this dollar amount or percentage amount, the insurer pays the full amount of the loss.
A type of deductible whereby the policy does not pay any loss unless the loss exceeds a flat dollar amount or a given percentage of the amount of insurance, but, if the loss exceeds this dollar amount or percentage amount, the insurer pays the full amount of the loss.
An auto dealer that is authorized by one or more auto manufacturers to sell their autos under the manufacturers' names and trademarks.
An auto dealer that is authorized by one or more auto manufacturers to sell their autos under the manufacturers' names and trademarks.
One company’s assignment to another company of the right to supply its products within a market.
An association of members with similar interests that provides various insurance and financial benefits to its members.
A type of cooperative insurer that resembles a mutual company but combines a lodge or social function with its insurance function.
An intentional misrepresentation resulting in harm to a person or an organization.
The act of misrepresentation that involves hiding money, property, or information with the intent to deceive.
Selling terms under which the seller agrees to place the goods alongside a vessel or on a wharf or pier at the named port of shipment, after which the buyer is responsible for loss or damage to the goods.
A shipping condition under which ownership passes from the seller to the buyer when the seller delivers the goods alongside a vessel for loading onto that vessel.
A standardized need-analysis form necessary to receive any form of financial aid from federal, state, or university sources.
A combustibility classification for occupancies with merchandise or materials that burn freely and constitute an active fuel.
A warranty that excludes loss caused by war, piracy, virtually any lawful or unlawful taking of the vessel, a nuclear weapon, a mine, or a torpedo.
Provision in ocean cargo policy eliminating coverage for any partial loss.
A shipping condition in which ownership passes from the seller to the buyer when the carrier delivers the goods to the buyer’s premises.
A shipping condition under which the seller delivers goods to the carrier at the seller’s risk and expense and the ownership then shifts to the buyer.
Selling terms under which the seller assumes all costs incurred to place the goods safely aboard the vessel named by the buyer and assumes responsibility for any loss or damage until the goods have been placed on board the vessel, after which the buyer is responsible for loss or damage to the goods.
An operational mechanism that sets forth the means and requirements for insurers to obtain a license to issue policies that are exempt from filing requirements for special risks.
The distance between the waterline and the vessel's freeboard deck, measured at the middle of the length of the vessel.
The compensation a carrier receives for transporting cargo.
An intermediary that arranges transportation between the sellers and buyers of goods.
Insurance covering loss of freight resulting from loss of or damage to the carrying vessel because of a covered peril.
Number of losses.
A representation that shows the probability of various numbers of losses over a certain period, such as a calendar year.
A problem with a product line that incurs more losses over a specific period of time than were contemplated when the rates were set.
A tabular presentation of data arranged into groups.
The heat and static electricity generated when two surfaces rub together.
A fire that stays in its intended place, such as a fire in a fireplace.
A mutual fund that imposes a sales charge applied at the time of initial purchase.
See Unbalanced contract.
An agreement whereby one entity transfers financial consequences of loss exposure to an insurer with the agreement that the entity will indemnify the insurer for most or all of the losses paid.
A licensed insurer that issues an insurance policy and reinsures the loss exposures back to a captive insurer owned by the insured organization.
A licensed insurer that issues an insurance policy and reinsures the loss exposures back to another insurer.
A licensed insurer that issues an insurance policy and reinsures the loss exposures back to another insurance company or to a captive insurer owned by the insured organization.
A producer performing account selection before submitting the account to the insurer.
In statistics, the measure that combines precision and recall and is the harmonic mean of precision and recall.
The expected maximum amount of combustible material in a given area of a building, including both structural elements and contents, commonly expressed in terms of weight of combustibles per square foot.
A rating measurement that classifies tornadoes based on wind speed and the destruction they cause; ranges from F0 (light damage) to F5 (incredible damage).
A life insurance reserve valuation method that defers the first-year policy reserves.
A clause that states that if the last report of values is less than the full value of the covered property at the time of the loss, then the insured participates in the loss in much the same manner as in coinsurance.
A broad examination that involves a thorough review of the insurer's records and financial position.
A warranty that promises to remedy a product defect within a reasonable time and without charge and to refund the purchase price or to replace the product if the repairs fail (“lemon provision”).
A specialized group in which individuals have similar skills or use the same resources to accomplish tasks.
Compares how organizations from dissimilar businesses perform similar functions.
A commercial property endorsement that provides modified replacement cost coverage on buildings; may be appropriate when insuring a building with a replacement cost far in excess of its market value.
The residual physical abilities of an injured worker.
See Functional valuation method.
An organization in which the owner retains line authority but can staff each function with an expert in each respective area.
Psychological factors involved in a patient’s symptoms that are interwoven with the patient’s physical condition.
A commercial property endorsement that provides functional valuation on personal property other than stock; may be appropriate when insuring equipment that can be replaced less expensively with new equipment that has greater capacity.
A plan that contains managers’ decisions about the functional unit’s goals and how the functional unit will support the division’s and the organization’s corporate goals.
The cost of replacing damaged property with similar property that performs the same function but might not be identical to the damaged property.
An organizational structure in which departments are defined by the operation they perform.
A valuation method in which the insurer is required to pay no more than the cost to repair or replace the damaged or destroyed property with property that is its functional equivalent.
A valuation method in which the insurer is required to pay no more than the cost to repair or replace the damaged or destroyed property with property that is its functional equivalent.
In government accounting, a financial account or other resources set aside for a specific purpose.
A method used to determine the price of a stock by analyzing data that are fundamental to the company, such as expected growth, dividend payouts, risk, and interest rates.
A risk of loss to which all members of a society, or at least a large number of people, are exposed in a single occurrence.
Financing technique whereby money is actually on hand in an account to pay for the losses.
The crime insuring agreement that covers loss of money and securities resulting directly from a fraudulent instruction directing a financial institution to transfer, pay, or deliver funds from the named insured’s transfer account.
A measurement of a property’s value as an item of exchange.
Commodities or bulk goods, all parts of which are presumed to be uniform.
The sudden ignition of unconsumed fuel in the furnace, resulting in a heavy soot being spread throughout the building.
A thin piece of metal, usually tin, lead, or bismuth, that normally holds the door open but that melts when the fire rises above a prescribed temperature, thereby closing the fire door.
Surgery to join two or more adjacent spinal vertebrae to achieve stability.
Before cargo has been loaded on a vessel, a carrier's interest in freight that will be earned in a definite engagement to transport the cargo.
The value that an amount today will be worth at a certain point in the future.
An exchange-traded agreement to buy or sell a commodity or security at a future date at a price that is fixed at the time of the agreement.
A type of logic that assigns values to indefinite data fields to facilitate more accurate probability.

G

A bar chart displaying the amount of time required for each activity in a project, the sequence of activities to be performed, and the current schedule status of the activities.
A level of excess insurance coverage between a primary layer and an umbrella policy.
The coverage form, filed by ISO, that covers the commercial auto and general liability exposures of auto and trailer dealers.
The endorsement for supplementing the Garage Coverage Form with premises-operations medical payments coverage of the type included in the Commercial General Liability Coverage Form.
The ownership, maintenance, or use of (1) locations for the garage business, including roads and accesses that adjoin these locations and (2) autos designated as covered autos indicated by the symbols in the declarations; also, all operations necessary or incidental to a garage business.
The coverage, included in the Garage Coverage Form, for damage to customers' autos in the named insured's care.
Coverage for damage to customers' autos left in the named insured's care while the insured is attending, servicing, repairing, parking, or storing them.
A coverage option that changes garagekeepers coverage from a legal liability basis to a direct coverage basis.
Option that modifies garagekeepers coverage to include coverage in situations when the insured is not legally liable for loss to a customer’s auto; this additional coverage applies in excess of what customers can collect under their own insurance.
Option that modifies garagekeepers coverage so that it will pay all covered losses on a primary basis, regardless of whether the insured is legally liable and regardless of whether customers can recover under their own insurance.
The coverage, included in the Garage Coverage Form, for damage to customers' autos in the named insured's care.
The seizure of property and its retention by a third party until the court decides the outcome of a legal dispute.
A type of fire suppression that uses gas extinguishing agents, typically halon, carbon dioxide, or environmentally friendly agents, to disrupt the chemical reaction in a fire.
A learner who saw the fall of the Berlin Wall, the first computer disc, and the emergence of the World Wide Web. Gen Xers are respectful of employers and electronically competent.
The invested assets of a life insurer that support interest-rate guarantees for which the insurer bears the investment risk.
An agent that transacts all of a principal’s business of a particular kind or in a particular place.
An insurance producer with broad powers to represent one or more insurers in a given area and for a specific line or lines of insurance.
In the Commercial General Liability Coverage Form, the most the insurer will pay during the policy period for the sum of the following: damages under Coverage A—Bodily Injury and Property Damage Liability, except damages that arise out of bodily injury or property damage included in the products-completed operations hazard; damages under Coverage B—Personal and Advertising Injury Liability; and medical expenses under Coverage C—Medical Payments.
The preface to the whole (homeowners) policy in which the insurer and the insured agree that the insurer’s coverage obligations are contingent upon the insured’s payment of premium and compliance with policy provisions.
A bond principal's and indemnitor's promise to pay the surety for any loss sustained from writing bonds for the principal. Alternatively referred to as a GAI or GIA.
Any costs associated with operating an organization's office.
Partial loss that must, according to maritime law, be shared by all parties to a voyage (cargo owners and vessel owner).
Expense incurred, usually by the shipowner, for the joint benefit of the vessel and cargo interests as the consequence of a general average act.
The deliberate and reasonable sacrifice of part of a vessel or cargo for the purpose of achieving safety when the voyage is imperiled.
An independent contractor who obtains the primary contract for a project and either completes all the work or subcontracts portions (or all) of the work to other independent contractors who specialize in such work.
The type of construction that includes construction for frame buildings, masonry construction, structural steel buildings, and concrete structures.
An independent contractor who obtains the primary contract for a project and either completes all the work or subcontracts portions (or all) of the work to other independent contractors who specialize in such work.
A monetary award to compensate a victim for losses, such as pain and suffering, that does not involve specific, measurable expenses.
An Occupational Safety and Health (OSH) Act requirement that employers comply with safety and health standards covering workplace conditions and operations and maintain workplaces free from recognized hazards likely to cause death or serious harm to employees.
The employer for whom an employee normally works.
A contractor that constructs locks and dams, power plants, large bridges, sewage and water treatment plants, or similar projects for public and private owners.
A business operations category that is so unusual that it is excluded from the basic classification for the purpose of rating workers compensation insurance.
Costs incurred by an insurer for policywriting expenses, policyholder-related service, loss control, premium audits, and participation with insurance advisory organizations.
A financial account for all of an entity's resources except those required to be accounted for in another fund.
A category of business operations that is common in many businesses and is, therefore, included in the scope of the basic classification in the Basic Manual for rating workers' compensation insurance.
The power of a court to hear a variety of types of cases.
An accounting record that summarizes the information from the books of original entry.
A creditor’s legal right or interest in a debtor’s property until satisfaction of any debt; in an agency, the agent’s right in a principal’s goods and papers held by the agent until all accounts between the principal and agent are settled.
An approach to accident causation that stresses that unsafe conditions, more than unsafe acts, cause workplace injuries and illnesses.
A municipal debt instrument secured by the full faith, credit, and taxing authority of the issuing state or municipality.
An expense that is necessary to run a business but bears no direct relationship to the volume of sales.
A partnership in which each partner assumes unlimited joint liability for all the partnership debts.
The version of the National Flood Insurance Program (NFIP) Standard Flood Insurance Policy that is used for insuring commercial buildings and contents.
An agreement that describes the rights and responsibilities of the parties to a reinsurance contract or treaty, accounting information needed for the risk ceded, and the use of salvage and subrogation in reinsurance recovery.
A common, standardized document that frees the first-party indemnitor in a third-party claim from all further claims arising out of the loss for which a specific sum is paid as legal consideration.
A kind of verdict that entails a complete finding and a single conclusion by a jury on all issues presented.
A deed that contains the grantor’s warranty that the title is free of all encumbrances, that the grantor has the title being transferred, and that no one else has a better title.
The ability of a model to apply itself to data outside the training data.
An anxiety disorder characterized by a variety of physical and behavioral symptoms that create unrealistic and excessive anxiety.
A statistical technique that increases the flexibility of a linear model by linking it with a nonlinear function.
A common set of accounting standards and procedures used in the preparation of financial statements to ensure consistency of presentation and reported results.
A tax on generation-skipping transfers, which generally becomes due when a gift is made to a donee who is more than one generation removed from the estate owner.
A search for the best approach and can lead to new ways of performing functions.
Contracting parties' actual assent to form a contract or their indication of intent to contract by their actions and words.
The latitude and longitude that correspond with an address.
A process of matching addresses with map positions.
Data regarding classifications of a population.
The division of markets by demographic variables combined with geographic segmentation.
An electronic device that uses global positioning systems (GPS), cellular communications, and vehicle telematics to predict driver behaviors and other factors that contribute to property and casualty losses.
The division of markets by geographic units.
The voluntary and gratuitous transfer of property without consideration.
The horizontal foundation supports for a structure's upper floors.
A global system of satellites that allows users to determine precise geographic locations.
A high-level organizational aspiration usually associated with strategy.
The linking of employees' goals with organizational goals to ensure that employees understand their role in attaining organizational goals.
An accounting assumption that a business entity will continue to operate indefinitely.
A measurement of joint motion used to establish quantitative criteria on which to base a medical rating of permanent impairment.
Consideration based on natural love or affection, or on moral duty, that is not sufficient to support a contract.
The manner of handling claims that requires an insurer to give consideration to the insured's interests that is at least equal to the consideration it gives its own interests.
A statute providing that a person will not be liable for damages as a result of rendering aid to an injured person, without compensation, at the scene of an accident.
The manner of handling claims that requires an insurer to give consideration to the insured's interests that is at least equal to the consideration it gives its own interests.
The value an organization has attained beyond the value of its tangible assets because of its favorable reputation.
The classification, other than a standard exception classification, that produces the greatest amount of payroll at an employer's location for the purpose of rating workers' compensation insurance.
A reinsurance treaty clause that specifies which law governs the treaty.
An act that can be performed only by government.
A defense to negligence that protects the federal government against lawsuits for tort without its consent.
Help to cover losses considered commercially uninsurable or not feasible to insure.
A provision that continues a life insurance policy in force for a certain number of days (usually thirty or thirty-one) after the premium due date, during which time the policyowner can pay the overdue premium without penalty.
The buyer of real property after execution of the deed.
One who conveys property to another.
An arrangement in which the bailee receives no compensation and owes a lower degree of care.
A promise not supported by valuable consideration and, therefore, not binding.
Water that comes from a dishwasher rinse cycle, a washing machine, a toilet, an aquarium, or a stagnant pool of seawater.
A large protuberance at the top of the shaft of the femur on the lateral surface.
Abrasive surface cleaning by bombardment of high-speed particles to remove unwanted material and expose a clean metal surface.
A basis of treaty application in which the treaty reimburses the primary insurer for covered losses before other pro rata reinsurance treaties apply.
An estimate of the loss payments made to date on the case plus the estimated future loss payments.
The maximum loaded weight specified by the manufacturer for a combination truck-tractor and semi-tractor or trailer for which the manufacturer designed a truck-tractor.
The total value of a person’s assets, including probate estate and property transferred by other means, such as by a beneficiary designation on a life insurance policy.
The sum of expense payments made to date on the case; plus estimated future attorney, consultant, and accountant expenses on the case; plus expenses to locate, preserve, insure, and prepare the sale of the principal's or indemnitor's assets.
A reserve amount that reflects the insurer’s best estimate of losses that have occurred but that might not be reported to the insurer for several years.
A reserve amount that reflects the insurer’s best estimate of losses that have occurred but that might not be reported to the insurer for several years.
A ratio that measures an insurer's loss exposure caused by pricing errors in its current book of business, reserve estimation errors, and reinsurance exposure; the sum of the net leverage ratio and the ceded reinsurance leverage ratio.
The amount of insurance that an insurer is willing to accept on a risk, including all reinsurance.
The percentage of sales remaining after deducting the cost of goods sold from sales, calculated by dividing gross profit by sales.
An act or omission that completely disregards the safety or rights of others and is exaggerated or aggravated in nature.
Premiums charged to policyholders.
An income statement value that represents sales or operating revenue minus the cost of goods sold.
The percentage of sales remaining after deducting the cost of goods sold from the net sales calculated by dividing gross profit by gross sales.
Price per exposure unit that includes a provision for the pure premium and expenses.
The pure premium divided by the sum of the expected percentage of losses and loss adjustment expenses.
The total amount earned by the named insured for shipping or transporting property, whether or not collected, during the policy period.
A vessel's gross tonnage as recorded by the vessel's classification society.
The total of all sales at the invoiced price.
A premium base that reflects the gross amount of money charged by the named insured for all goods or products sold or distributed, operations performed, or rentals made.
The unit of measurement of the volume of a vessel's enclosed spaces, counting each 100 cubic feet as one gross ton.
A measurement of the volume of a vessel’s enclosed spaces.
Maximum loaded weight for which a single vehicle is designed, as specified by the manufacturer.
A device that monitors the flow of current through a circuit; when it detects a leak (ground fault), it shuts the power off to the circuit.
The total amount of a loss before application of deductibles, retentions, or reinsurance.
Various forms of protection available to groups of individuals as a result of their employment or affiliation, including group retirement plans, group life and health insurance, and group auto and homeowners insurance.
A captive insurer owned by a group of companies, usually operating similar businesses, rather than a single parent.
A captive insurer owned by a group of unrelated organizations, usually with similar risks.
A captive insurer owned by a group of unrelated organizations that covers their loss exposures, which usually have similar characteristics. The group of organizations is often referred to as an affinity group.
A group of employers in the same industry that jointly (as a whole) and severally (individually) guarantee payment of workers compensation benefits to the employees of the group's members. A not-for-profit association or corporation is typically formed to which they pay premiums for self-insurance purposes.
A group of employers in the same industry that jointly (as a whole) and severally (individually) guarantee payment of workers compensation benefits to the employees of the group's members. A not-for-profit association or corporation is typically formed to which they pay premiums for self-insurance purposes.
An endorsement attached to an insurance policy covering mortgaged property that gives the insured a direct cause of action against the reinsurer for the entire covered amount of a loss if the primary insurer becomes insolvent.
A debt instrument guaranteed by an entity other than the issuer.
The standard workers compensation premium modified by premium discount and experience rating.
An insurance plan with a fixed premium (or fixed rate applied to an exposure base) for the policy term regardless of the number or amount of losses.
Freight that the shipper is obligated to pay even if the cargo is not delivered.
Rider that permits the policyowner to buy additional amounts of life insurance at standard rates without evidence of insurability.
A deposit-type contract issued by life insurers that guarantees repayment of principal and interest (either fixed rate or floating rate) at specific periods of time.
An option in a variable annuity that provides guaranteed income payments plus access to a portion of the account balance during the accumulation and annuitization periods.
An option in a variable annuity guaranteeing that the account value will not be less than the amount invested in the contract.
A variable annuity guarantee that the greater of the cash value or the amount invested in the contract will be paid in the event of the annuitant’s death during the accumulation period.
An option in a variable annuity contract that guarantees a minimum amount of retirement income.
A type of guaranteed lifetime withdrawal benefit (GLWB) in a variable annuity in which guaranteed withdrawals are provided for a specific time period or amount.
Rider that permits the policyowner to buy additional amounts of life insurance at standard rates without evidence of insurability
A payroll system that guarantees the employee a wage for a minimum number of hours worked per week.
A person or organization that has promised to perform a duty in the event the party whose duty it was initially (the principal) fails to perform it.
A state-established fund that provides a system for the payment of some of the unpaid claims of insolvent insurers licensed in that state, generally funded by assessments collected from all insurers licensed in the state.
A person appointed by a probate court to safeguard and distribute the estate assets for a minor’s or incompetent’s benefit.
A person appointed by a probate court to protect the interests of a minor during litigation, when the litigation delays the appointment of a permanent guardian.
A classification of bonds that guarantee that a guardian will faithfully and diligently administer a minor's estate or preserve the rights and assets of a minor involved in litigation.
A person appointed by a probate court exclusively to sell real estate to benefit a minor’s estate.
A law requiring a passenger who has been injured in a vehicle accident and is seeking to recover damages to establish that the accident resulted from the driver’s gross negligence.
The commercial crime endorsement that covers a lodging facility against liability for loss to its guests’ property inside the insured’s premises or in the insured’s possession.
A test that limits premiums paid relative to the death benefit. If a contract satisfies this test, it may be considered a life insurance contract and be subject to generally favorable life insurance tax treatment.
Instructions that are enforceable when they are specifically part of a Rule.
A set of industry-agreed-upon principles designed to resolve situations of overlapping coverage.
An admission against interest in which a party admits to responsibility at a trial.
A rotating apparatus used to stabilize or maintain direction in navigation systems.

H

An occupancy hazard category consisting of apartments, hotels, motels, and nursing homes and that presents a wide variety of common and specialized hazards.
A theory that considers accidents as resulting from mechanical failures.
Set of international rules for the carriage of goods, particularly defining the carrier’s and shipper’s duties and obligations.
Small, rounded ice pellets that often form during thunderstorms.
A perceptual distortion that occurs when a person uses a positive or negative attribute to form an overall impression of another person.
An automatic fire sprinkler system in which halocarbons are used to disrupt the chemical reaction of fire; commonly used in computer rooms and magnetic-tape storage vaults.
A series of ionized hydrocarbon gases and liquids (halogenated hydrocarbons) that have the ability to halt chemical reactions and thus extinguish fires rapidly.
The coverage that insures an airport or fixed base operator against liability resulting from physical damage to aircraft in the insured’s care, custody, or control for safekeeping, storage, service, or repair.
A withdrawal right up to the full applicable annual exclusion that will lapse if not exercised within a specified period, but only to the extent of the lapse-protected amount for that year.
A tangible item that is easily audited.
Actions that are undertaken deliberately to defraud.
Merchandise made principally from glass, metal, and china, which can be cleaned after exposure to smoke or water.
Market conditions in which insurer competition diminishes, buyers have difficulty finding coverage, premiums increase, and insurer profitability rises.
The limitation of capital available for investment as a result of external constraints.
An exception to the application of a zoning ordinance for lots that, because of size, topography, or other physical limitations, do not conform to the ordinance requirements for the zone.
A physical machine and all of its component parts and cables.
Wood that comes from deciduous, broadleaf trees such as maple and oak.
A federal statute that governs a common carrier’s liability for goods shipped by water between points in the United States.
A corporate-level strategy through which a company seeks to gain short-term profits while phasing out a product line or exiting a market.
A condition that increases the frequency or severity of a loss.
A method of analysis that identifies conditions that increase the frequency or severity of loss.
A grouping of injuries classified according to their relative occupational injury severity, used in workers compensation retrospective rating.
Risk from accidental loss, including the possibility of loss or no loss.
A classification of bonds that guarantee compliance with EPA and state laws for the closure and post-closure care of hazardous waste facilities.
A vessel somewhat larger than a charter boat, whose passengers pay a fare for partial-day or full-day fishing excursions; may carry from twenty to several hundred passengers.
Federal legislation establishing standards for health insurance information exchanges and health coverage protection when jobs are lost or changed.
An organization that provides all the care needed by its members in exchange for a fixed fee.
An employer-funded medical savings account that reimburses employees for medical expenses not covered by the employer's group insurance plan; distributions to the employee are tax deductible to the employer, and employee reimbursements from the employer are considered tax free.
A medical savings account available to consumers enrolled in a high-deductible health plan; the funds contributed to the account are not subject to federal income tax at the time of deposit.
Legislation that required contractors on public works to post a surety bond and promptly make payments for labor and materials; it was replaced by the Miller Act.
Secondhand information that a witness testifying in court heard from someone else but did not personally see or hear.
The rule of evidence that prevents the admission of out-of-court statements not made under oath by a person who is unavailable to testify.
A type of detector wired to a local alarm, remote, or central station system that sounds alarms under ­abnormal heat conditions.
A unit that can act as an air conditioner and can reverse itself and draw heat from the outdoors to heat the inside of a house.
A type of construction used for highways, bridges, dams, roads, railroad beds, and similar projects.
A type of joisted masonry construction that is considered more fire resistant than typical joisted masonry construction.
A CLM vehicle size classification for trucks with a gross vehicle weight (GVW) of 20,001 pounds to 45,000 pounds.
A CLM vehicle size classification for trucks with a gross combined weight (GCW) of 45,000 pounds or less.
A financial transaction in which one asset is held to offset the risk associated with another asset.
Damages associated with the loss of physical and intellectual gratification and other lifestyle losses.
A theory that states an unsafe act began the chain of events that ultimately led to the injury.
A layer in a neural network in which neurons learn and recode information received from input data.
A modeling technique in which multiple clusters are grouped according to their similarities.
A risk that requires high limits of insurance that may exceed the underwriting criteria of admitted insurers.
An agreement in arbitration that stipulates that no matter what the arbitrator decides, the insurer will not pay more than the high specified amount and the claimant will not receive less than the low specified amount. The high and low are decided in advance and expressed as a range.
A large property whose construction meets high standards of risk mitigation and control characteristics and whose management maintains best practices loss control and risk mitigation techniques for the specific occupancy.
Any structure taller than seventy-five feet (National Fire Protection Association definition), or a building taller than the tallest ladder available to the fire service.
A clause in a bill of lading in which the cargo liability limitations available to carriers are extended to terminal operators and stevedores.
The total replacement of the hip joint with an artificial prosthesis.
An auto that the insured leases, hires, rents, or borrows, excluding autos leased, hired, rented, or borrowed from employees, partners, LLC members, or members of their households.
Autos leased, hired, rented, or borrowed, but not from employees or partners or members of their households.
A plot of a distribution of observations with the horizontal axis representing the class intervals and the vertical axis representing the frequency or probability of outcomes.
The original cost of a property.
The ratio of insurance policies written to those that have been quoted to applicants for insurance.
A vehicle whose operator cannot be identified.
Lowest-cost coverage for owner-occupants, providing specified perils coverage only.
Coverage for owner-occupants, providing open perils coverage on buildings and specified perils coverage on personal property.
Coverage for tenants, providing specified perils coverage on personal property.
Coverage for owner-occupants, providing open perils coverage on buildings and personal property.
Coverage for owner-occupants of condominium units, providing specified perils coverage on personal property and building items.
Coverage for owner-occupants of dwellings not meeting HO standards, providing specified perils coverage only.
The person to whom a negotiable instrument has been issued or endorsed and who possesses it for value, in good faith and without notice that it may not be valid, can be claimed by another, is overdue, or was previously dishonored.
A contractual provision that obligates one of the parties to assume the legal liability of another party.
The length of time an asset is owned, which generally determines whether the capital gain is subject to taxation as a long- or short-term capital gain.
In the model training process, existing data with a known target variable that is not used as part of the training data.
A tenant who has a lease for a number of years and, at the expiration of the lease, continues to occupy the premises.
A type of burglar alarm situated so that it can be triggered by a bank teller or store clerk during a robbery, sending an alarm signal to a central station company or the police.
Policy that covers most of the property and liability loss exposures that arise out of residential property ownership and occupancy, as well as property and liability loss exposures that individuals and families may have while they are away from their residences.
Units of exposure that face approximately the same expected frequency and severity of loss.
The tendency of people to connect to others who are similar to them.
In linear modeling, variance of the model errors around the estimated mean of the target variable is the same regardless of its size.
An examination to detect symptom magnification or fabrication of pain. The patient lies on the back, and the examiner places one hand under each heel while the patient lifts one leg and keeps the knees straight. A patient who does not lift the leg, or tries to lift the leg but the examiner does not feel pressure on the opposite heel from the other leg trying to “help” the weaker one, is probably not trying.
A combination of two companies in the same line of business.
The use of the period-to-period percentage changes identified in common-size statements to identify trends.
An analysis of services ordered by the doctor, services actually performed by the hospital, and services billed by the hospital to ensure the appropriateness of hospital charges.