The Institutes Glossary


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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 transfer of a property's custody.
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.
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 methodical process used to identify causal factors stemming from physical, administrative, and procedural barriers or controls that should have prevented an event from happening.
A systematic process that can be used to identify physical, administrative, and procedural barriers or controls that should have prevented the accident.
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.
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.
An insurance agent's authority to effect coverage on behalf of the insurer.
A conditional receipt that provides coverage on the date of receipt until a specified time or until the insurer disapproves the application.
The science that integrates physics and human anatomy; used to determine whether impact is severe enough to have caused an alleged injury.
A process that views people at work as special kinds of machines functioning within environments filled with other machines.
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.

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