A B C D E F
G H I J
K L M N O P Q
R S T U V W X
Actual Cash Value
The fair market value of property taking into account factors that
might augment or reduce the value of the property in
Additional Living Expense
Coverage applicable when an insured's dwelling is damaged by an
insured peril to such an extent that one cannot live in it until
repaired. This insurance pays the extra amount it costs to live
elsewhere until repairs are made, such as the cost of living in a
1) A person who is employed to act on behalf of another.
2) An insurance agent is one who contracts with one or more
insurance companies to sell their insurance policies to the public
and is paid a commission on or receives compensation for such
business. See also Broker.
All Risk Policy
A name given to an insurance policy which covers against the loss
caused by all perils except those which are specifically excluded
by the terms of the policy. Frequently, a policy of insurance is
written to insure damage to property caused by specific "named
perils," which are listed on the policy. However, policies may be
issued in certain cases to insure against "all risks of loss or
damage" and are then called "all risks" policies. The term excludes
insurance against certain hazards.
Amount of Insurance
The limit of payment for which an insurer is liable under a
The person or firm requesting insurance.
A request for insurance. This may be done verbally, in writing or
by using a printed form.
A valuation or an estimation of the value of property usually done
by an expert in that field who has no personal interest in the
A clause in an insurance policy that gives the insurer the right to
demand an appraisal on the damaged property. It gives both the
insurer and insured a means of settling disputes over the value of
lost or damaged property.
Person who because of special knowledge is vested with authority in
determining the real value of property or damage.
That which belongs to something else, e.g., appurtenances of
automobile. The term "appurtenances" means that one thing belongs
to another thing, that the two will remain in relationship, and
will pass with the ownership.
Reference of a dispute to one or more impartial persons chosen by
the parties to the dispute to determine their rights and/or
obligations. The parties agree in advance to abide by the
arbitrament. Each party has a chance to be heard.
Architects and Engineers
Insurance coverage specifically tailored to meet the risks of
Architects and Engineers. Coverage usually
includes Professional Liability and General
Liability, as well as physical damage to owned property and
business interruption (loss of income).
1) The witnessing of signatures. Where a document is signed a
witness who has seen the document signed before him may "attest"
that the signatures on the document are genuine.
2) Audited financial statements are said to be "Attested," i.e. the
auditor attests the corporation's representations.
1) An examination of evidential matters to determine the
reliability of a record or assertion.
2) In connection with financial statements a review of the
accounting records and other supporting evidence of an individual
or an organization to assess the reasonableness of the statements
as presented (not a guarantee of accuracy).
After a claim has been paid or the property restored, most policies
automatically return the stated limit of insurance to its original
Insurance coverage that provides indemnity and/or compensation for
injury or physical damage which ensues from the ownership, use or
operation of an automobile.
In contract and property law one to whom goods or property are
entrusted for a stated purpose. Can be either gratuitous (for no
consideration) or for hire (for consideration).
The act of placing goods in the possession of a
A person entrusting goods to another.
Financial statement showing assets, liabilities and equity of a
A starting charge made to which is added the premium developed by
the application of rates as directed.
Physical improvements beyond mere maintenance or repairs that
augment the value of a property.
A bid bond is a bond where the contractor i.e. the principal
guarantees the obligee i.e. the owner, that the principal will
honor the bid and the sign the contract, if bid is awarded. In
default of the bid the owner may sue both the obligator i.e. the
principal and the surety. This bond guarantees that the bidder will
carry on the contact at the bid price if bid is awarded. If the
bidder is allowed to take away the bid before granted, no action
may be taken against the bidder or bid security. The bid bond
generally indemnifies the faithful performance with regards to the
Bid Bonds guarantee the sincerity of the bidders.
A written or oral agreement given by an insurer to insure a risk,
pending the issue of a policy. A binder is deemed to be the policy
and must be cancelled in the same manner.
An individual policy covering several crime perils on a single
amount rather than on individual limits.
Insurance on two or more items, or locations, in one aggregate sum
insured without separate amounts for each item.
Boiler and Machinery
Coverage that indemnifies in the event of loss with respect to and
arising from the ownership, use and operation of boilers, pressure
vessels and machinery.
Frame construction with a single course of brick as an outside
An independent person or firm who acts on behalf of the insured in
placing business with insurance companies.
Insurance coverage on property under construction including loss to
buildings or ships, including machinery and equipment, under course
of construction, and materials incidental to
Rules and regulations of governmental bodies defining standards
that construction in that jurisdiction must meet.
Devices of various types which give warning of entry into premises
by unauthorized persons.
Unlawful removal of property from premises involving visible
Insurance against loss of property caused by burglars.
A form of insurance to protect a business against the loss of
services of a key employee or employees. Usually accident and
sickness, however, life insurance may also form part of the
package. Also called Partnership Insurance or Corporation
Various types of insurance against business expenses and loss of
income resulting from a fire or other insured peril.
A law or ordinance dealing with matters of local or internal
regulation made by a local authority or by a corporation or
An endorsement explaining how a particular insurance company deals
with a claim which is affected by a local by-law.
Care, Custody and
A term used primarily in liability coverages which refers to
property belonging to another but which is legally in the insured's
possession or under his control.
Goods being transported, such as the load of a truck or the goods
being carried by a ship. The cargo of a ship does not include the
equipment needed to operate the ship.
When an insured wishes to cancel a life insurance policy before the
full term, the policy may have a cash value which is stipulated in
the policy. The longer the policy is in force, the higher the cash
value is likely to be. It is a sum paid back by the life insurance
company to the insured when an insured requests the termination of
Loosely used to describe an area of insurance not particularly or
directly concerned with life insurance, fire insurance or
automobile insurance. Most frequently refers to liability, burglary
and plate glass insurance but may include Fidelity and
An insurer cedes part of a risk to a reinsurer when it transfers or
reinsures part of the risk.
Reproduction of a document, that authority having custody of
original signs and attests as a true, genuine and authentic
Canadian Chartered Insurance
A professional designation earned by examination following study
A professional designation (Canada) earned by the successful
completion of several educational requirements as designated by the
Insurance Institute of Canada.
Insurance coverage specifically tailored to meet the needs of
faith-based organizations, such as churches, mosques and
rdings may include coverage
for Professional Liability
and General Liability, as well as physical damage to owned
property, business interruption (loss of donations) and coverage
for Physical and Sexual Abuse claims.
1) The civil law of the Province of Quebec.
2) The reduction of law to a set of rules. In some countries for
example, France, most of the laws of the country were at one time
reduced to a set of rules after the style of the Roman Code
although these too have subsequently been subject to certain new
statutes. In some jurisdictions, certain sections of the law are
reduced and simplified to a "Civil Code."
Disturbance involving a large number of individuals. An uprising of
people creating a prolonged disturbance.
Strictly speaking, a claim is the exercising of the right of an
insured to be indemnified by his insurance company for damage
suffered. It is frequently used, however, to indicate the amount of
In practice, it is any notification of a possible loss under an
insurance policy whether any payment is likely to follow or
For every claim that is reported, the insurance company must
set aside reserves equal to the figure which it is anticipated the
claim will cost.
One who makes a claim.
An employee of an insurer who handles and is responsible for
Claims Made Basis
Provision in some insurance and reinsurance contracts covering only
claims made during term of the contract.
Words in a policy which describe certain specifications,
limitations or modifications.
A clause in an insurance policy requiring an insured to carry a
certain percentage, usually 80, 90 or 100 per cent of insurance in
relation to the value of the property insured. If the insured fails
to do this, then he agrees to be a self-insurer of all losses large
or small in the same ratio as his failure to comply with the
percentage required, is related to the insurance required. For
example, a building valued at $100,000 with an 80 per cent
co-insurance clause would require insurance coverage of $80,000. If
coverage is carried for only $40,000 then the insured is a
self-insurer or coinsurer for $40,000 of the $80,000, and the
insurance company would be responsible for the same amount. This
ratio would apply even if a loss were only $5,000. Then the
insurance company would pay $2,500 and the balance or coinsurance
penalty of $2,500 would be borne by the insured.
Two or more persons or companies who may be sharing a loss. A
company whose policy covers the same risk as that of one or more
other companies, is a co-insurer whether the policies are written
separately or together.
Falling in of a building.
A vehicle or a ship collides when it strikes another object or
another vehicle or ship. Collision insurance insures against loss
A secret agreement between persons to defraud another, e.g., an
insured driver of an automobile and his passenger may misrepresent
the facts of an accident in order to have monies paid to the
passenger under the insured's automobile insurance
Property used in a business which requires it to be moved from
place to place, may be insured on one of the forms of commercial
property floaters. A television studio, for example, may require
insurance on their equipment even though it may be out of the
regular studio much of the time. In most instances, these are
written on special forms suited to the particular need such as
contractor's equipment floater, inland marine block policy,
jeweler's block policy, salesman's floater policy,
One who offers to transport merchandise for hire and must accept
shipments from anyone who wishes to use the services. Different
laws and rules govern common carriers than do private or contract
carriers who only transport the goods of those with whom they have
American, Canadian and British law derives its force and authority
from the universal consent and practice of the people over the
years. Certain aspects of the law are written into statutes. The
underlying principles and usages and rules of action which do not
rest for their authority on this statutory or legislative law are
to be found in principles set forth by decisions of the Courts over
A policy particularly suited to a manufacturer, contractor or large
wholesaler or retailer providing broad coverage for claims made
against him for bodily injury or damage to property of others for
which he may become liable and which arise out of his entire
A form of liability insurance for individuals which insures the
policyholder in the event he has become liable to pay money for
damage or injury he has caused to others. This form does not
include automobile liability, but does cover almost every activity
of the policyholder except those which arise from the operations of
a business. Hence "Personal" Liability.
The general terms or requirements upon which the insurance is
based. For the mutual understanding of the parties the conditions
will commonly state such matters as how the policy can be cancelled
or renewed, provisions with respect to change of the insured's
interest, provisions as to what an insured should do in the event
of a loss, and conditions as to what he should do subsequent to a
A condition precedent is one that must be fulfilled prior to
the general fact at stake. The insured, for example, is required to
give notice of a claim and fulfill certain other obligations as a
condition precedent to his receiving a settlement.
A condition subsequent is one which is applicable subsequent to
the event, as for example, the insured is required to co-operate in
the disposition of the claim and to co-operate, other than in a
monetary way, to assist to recover from anyone who is responsible
for the loss.
Conditions of the
Articles in contract defining or describing terms, responsibilities
of owner and contractor, performance and payment schedules, and the
Is the individual ownership of a single unit in a multiple unit
building or group of buildings, together with a percentage interest
in that part of the total property owned jointly by all unit
owners. In an apartment building, each apartment would be a unit
and the stairways, pathways and parking areas would be in common
ownership. Condominium property requires special insurance
Consent of Surety
Consent of Surety are issued at the time of tender and state that
if the contractor enters into a contract, the surety company will
provide the final bonds.
The word "consequential" means something following as an effect or
result. It is an indirect result of the occurrence that causes the
The difference between a direct loss and a consequential loss
can be seen in the destruction of a power station by wind. The
damage to the power station is a direct loss by wind. There is
actual physical damage directly resulting. The destruction of the
power station also interrupts the generation of power by the
station. For example, a cold storage plant is without electrical
power. Foodstuffs spoil as a result or as a consequence. This is a
consequential loss, not a direct loss.
The inducement to a contract; the cause, motive or price which
induces a contracting party to enter into an agreement, act or
forbearance or promise thereof. It is an essential part of a
binding contract. Consideration is either expressed or
The money, or whatever is being used in substitution of money,
paid for the article or contract is "the
Insurance coverage specifically tailored to meet the needs of
General Contractors and Sub Trades. Wordings usually include
coverage for General Liability, physical loss damage to owned
property and business interruption (loss of income).
A partial loss but where the damage is so extensive that repairs
would cost as much or more than the repaired property would be
worth, or the limit of insurance.
An agreement made between two or more persons, which is intended to
be enforceable at law, and is constituted by the acceptance by one
party of an offer made to him by the other party, to do or to
abstain from doing some act. The offer and acceptance may either be
expressed or inferred by indication in the conduct of the
Contract bonds are used primarily in the construction and
manufacturing industries to guarantee a contractor's or
manufacturer's contractual obligation to a project owner. In the
construction industry there are different types of contract bonds
to support a project from tender to completion. These may be
performance bonds, labour and material bonds, or bid
Commercial bonds fulfill public, legal and government security
requirements against financial risk and to guarantee that a
business, organization, or individual complies with specified legal
Agreement, addenda, supporting documents, general conditions,
supplementary conditions, specifications and drawings and
modifications to an agreement.
Contract Surety Bonds, through the Surety company's financial
strength and rigorous prequalification procedures, provide security
to Owners, Sub-contractors, and others that the Contractor will
transform plans and specifications into a timely and successfully
Insurance protecting contractor from defined liability claims
arising from contractor's operations.
Liability assumed by a contract either written or implied. Legal
liability policies are based upon liability in tort or negligence
and have very little coverage normally for contractual liability
(with a possible exception of such matters as sidetrack agreements,
etc.) However, contractual liability may be covered in many
instances as an additional risk with an additional
Many accidents are the fault of both parties who are involved in
the occurrence. The plaintiff who sues another party for damages
also may be guilty of some negligence, which is a concurrent cause
of the damage. Such a party is guilty of contributory
To protect with insurance, or the insurance protection
The nature of protection afforded by a particular policy. Can be
used at times interchangeably with "insurance" or "protection" as
"fire coverage" or "fire protection" or "fire
A report provided by a commercial credit reporting company which
provides details on the reputation and financial strength of an
individual or corporation.
Immediate control that an authority exercises over property or
Copy of the policy or bond for company or agency records. This term
may also include all correspondence, notes, inspection reports,
credit reports, etc. pertaining to the policy.
Data Processing (Equipment Insurance)
A special insurance usually on an all risks basis. Covers physical
loss and loss from business interruption if the damage necessitates
shutdown of operations.
A provision in an insurance policy most commonly found in fire
insurance providing indemnification for the cost of removal of the
debris after a fire.
Statement, signed by the insured, warranting that information given
by him is true.
To refuse acceptance of an insurance application.
An agreed specified sum to be deducted from the amount of loss and
assumed by the insured. See also Franchise.
A clause defining the amount of loss for which insured is liable;
defines insurer's and insured's contributions to cover
Reduction in value of property through use, aging, deterioration
A system for the collection of premiums whereby the insurance
company "directly bills" the insured for the premium in lieu of the
conventional collection of premiums by the agent or broker. The
insurer sends a statement to the agent, usually monthly, recording
the premiums collected directly, and credits the agent with the
commission on those items.
Directors and Officers
Protection for officers and directors of a corporation against
damages resulting from negligent or wrongful acts in the course of
their duties. Also covers the corporation for expenses incurred in
defending lawsuits arising from alleged wrongful acts of officers
or directors. These policies always require the insured to retain
part of the risk uninsured.
Inability to carry on in one's normal occupation due to accident or
Act of making known something known.
Coverage for legal liability imposed on an employer to pay damages
to an employee injured by the employer's negligence. This is not
Worker's Compensation Insurance where special acts of legislature
set out specifically the relationship between the employer and
employees in certain circumstances and formula by which awards in
each case are computed.
Material for use on one machine, one vehicle, one unit. For
example, a car comes "equipped" with five tires. Tires other than
those on the car are not "equipment" of the car. They are instead
the dealer's "stock of tires." Equipment also includes contractor's
equipment, e.g., backhoe, bulldozer.
Errors and Omissions (E&O)
Synonym for Professional Liability Insurance.
1) In law, one of the various interests in land.
2) The net worth of an individual's worldly goods.
Costs a contractor anticipates for a project.
A tentative premium set in the anticipation of being approximately
correct but which may be increased or decreased when the final
premium calculation is made.
A bar created when someone by his action or lack of it indicates
that he will not exercise a right he has. He stops himself from
exercising his right later, e.g., if A owns a pen and stands by and
watches B sell the pen to C, as if the pen belonged to B, then A
cannot later reclaim the pen, arguing that it was his.
Risks, perils or properties defined in the policy as not
Comparison of premiums earned with claims incurred for: a) an
individual insured b) group of insureds c) class of
End of the policy period.
A rupture of a pressure vessel of some kind due to excessive
internal pressure (usually accompanied by a loud
The hazard threatening a risk because of external or internal
An endorsement that enlarges the coverage afforded by the primary
policy. Coverages such as windstorm, hail, smoke, riot are extended
coverages on a fire policy.
A form of insurance policy covering the extra expense of an insured
in carrying on a business following a loss by an insured
Brick, chosen for its visual rather than its structural
characteristics, used on wall's exposed surface.
Face of Policy
The front of the policy on which normally the name of the insurance
company, the name of the insured, the amount of insurance and the
type of insurance appear among many other items.
Fair Market Value
Price at which a buyer and seller, under no compulsion to buy or
sell, will trade.
Fellow, Chartered Insurance
A professional designation awarded to a Chartered Insurance
Professional (C.I.P.) after the successful completion of several
additional - university level - educational requirements as
designated by the Insurance Institute of Canada.
Damage caused by fire.
Fire Department Service
A provision in a fire insurance policy agreeing to pay the cost of
bringing a fire department to the location of the property insured
in the event of a fire. It is valuable where the insured's property
is not in a built-up area with its own fire department or where the
risk is sufficiently large to require additional fire department
Coverage for losses from fire and lightning and also the resultant
damage caused by smoke and water. Usually supplemented by Extended
A public official involved in fire prevention and in investigation
of fires particularly where arson is suspected.
A fire resistant building or article is generally designed to
resist certain higher heat temperatures for a certain period of
time. It has a lesser degree of resistance to fire and ranks
slightly more hazardous than "fireproof."
Tangible long-term assets such as land, building, furniture,
fixtures, machinery, equipment etc. held for use rather than for
Anything that is attached to real property is known as a "fixture."
Fixtures when permanently attached to real property become part of
the real property. Tenant's fixtures are fixtures of a removable
nature and are the responsibility of the tenant for insurance
purposes. Whether a fixture is a tenant's fixture and movable or a
landlord's fixture and immovable is frequently determined by the
purpose of the fixture.
The cancellation of a policy as of the effective date with all paid
In automobile insurance, this is a policy insuring a number of cars
for one owner. In marine insurance, a policy insuring a number of
ships for one owner.
A policy covering the same risk at a number of perhaps unspecified
locations possibly over a wide area (even world-wide); usually
includes goods being frequently moved from one location to another,
e.g., Fur Floater, Jewelry Floater, Contractors' Equipment Floater,
1) The illegal signing of another's name to a document, such as, a
2) Falsely making or altering a written instrument.
Refers to the construction of a building built of
1) Methods used to deceive to cause unwarranted favourable decision
for one's own benefit.
2) Deliberate misrepresentation or misstatement.
3) Concealment of facts which should at the time be made
Dishonest; based on or obtained by fraud.
A false statement made knowing it to be false and intending another
to act on it to his detriment, or made carelessly or recklessly
without regard to whether it is true or false.
In insurance it is most frequently found in the intentional
misrepresentation of a risk to obtain insurance or in proof of loss
after the loss occurs.
Free on Board
When goods are shipped F.O.B., the shipper is responsible only
until the goods have been placed on board the vessel or freight car
or truck or other means of transport. After that the risk belongs
to the consignee.
A fire confined to the place it is supposed to be, e.g., in the
fireplace; in the incinerator. See Hostile Fire.
The legal exposure under common law, Statute or Civil law, to act
as a reasonably prudent person would, or would not, under the
circumstances. Liability may be for bodily injury, property damage,
or monetary loss. The standard of care is lower than that of a
General Liability Insurance (CGL
Insurance designed to cover the normal exposure for negligence for
bodily injury or property damage. Policy wordings cannot provide
less coverage than the wordings promulgated by the Insurance Bureau
of Canada, but may or may not include numerous extensions depending
on the insurer providing coverage.
Insurance against the breakage of glass. The coverage is usually
extended to certain other incidental expenses associated therewith.
See Plate Glass.
Most ordinary contracts are good faith contracts. Insurance
contracts are agreements made in the utmost good faith. This
implies a standard of honesty greater than that usually required in
most ordinary commercial contracts.
The degree of negligence somewhat greater than ordinary negligence.
It may be a reckless wanton and willful misconduct causing bodily
injury and/or property damage.
A loss may be covered by more than one policy. One policy may have
a co-insurance clause and the other may not. How any loss in such
circumstances should be apportioned between the various insurance
companies involved creates a problem. To meet this problem, the
majority of insurance companies have agreed to certain rules and
principles. These principles override the actual wording of the
policy so the insured is indemnified with least
Dwelling place; residence.
1) A risk or probability that the event insured against might
2) Condition which engenders or increases the chances of a
Hazard arising from physical condition or characteristics of the
object that is insured, e.g., using and storing volatile materials
and substances on the premises.
Highway Traffic Act
The body or system of laws which govern the obligations of the
provincial governments and users of roads. A breach or conviction
of any of these laws may be an offence but does not of itself
impose legal liability, but it may be relied upon in any proceeding
to establish or negate any liability.
Hit and Run
Collision between motor vehicle and/or a motor vehicle and another
object and/or a motor vehicle and a pedestrian where a driver
leaves the scene of the accident without identifying him/herself.
This is an offence under the Highway Traffic Act.
The taking of money or property by threat or the use of force or
A multi-peril insurance policy for dwelling risks, combining
coverages for fire, and extended coverages including theft, and
A fire which occurs in or escapes to a place not anticipated, e.g.,
a fire in a fireplace becomes uncontrollable and ignites something
externally. See Friendly Fire.
House of God
See Church Insurance.
Additions or changes to a rented premises by a tenant at his own
expense. Also called Tenant's Improvements.
Malicious setting on fire or preparing, providing and setting the
means for fire to start.
The date and time on which coverage under an insurance policy takes
To provide compensation for loss or expenses incurred.
A contract, expressed or implied, to repay in the event of a loss.
Insured neither gains nor loses.
The policy period.
One who adjusts losses on behalf of insurance companies, but is not
employed by any one insurance company.
Easily set on fire.
Insurance coverage specifically tailored to meet the needs of the
Information Technology company. Coverage usually
includes Professional Liability and General
Liability, as well as physical damage to owned property and
business interruption (loss of income).
Insurance policy which is in effect, and has not expired or been
An interest which the insured must have in the subject matter of
the insurance he buys so that if the event insured against occurs,
the insured will suffer a pecuniary loss.
A contract in which one party, the insurer, for monetary
consideration agrees to reimburse another, the insured, for loss or
liability for a loss on a defined subject caused by specified
hazards or perils.
Insurance Bureau of Canada
The trade association of the Property/Casualty insurance industry
in Canada. It concerns itself with such matters as Public
Relations, Collection of Statistics, Promulgation of forms etc. It
has a substantial permanent staff but also many committees made up
of volunteers from the senior ranks of insurance
Insurance Crime Prevention
An organization supported by property and casualty insurers which
investigates fraudulent insurance claims and provides a deterrent
to such losses. Loss prevention information is maintained by the
Bureau for use by member insurers, independent claims adjusters and
government authorities across the country.
Insurance Institute of Canada
The educational body of the general insurance industry. It consists
of an association of provincial institutes. Among other things, it
conducts correspondence courses, holds annual examinations and
grants diplomas. See Insurance
Links Resources page
A written contract of insurance.
The entity (individual or otherwise) whose risk of financial loss
from an insured peril is protected by the insurance
The company providing the insurance coverage.
Describes the intent of the policy, just what insurance coverage is
provided by the policy and in what limits.
1) The agent/broker negotiating insurance or reinsurance contracts
2) Any party representing another party, in negotiation with a
Itemized list of goods and property on hand.
Joint and Several Liability
This exists when the situation is such that a creditor in the case
can sue any one of the debtors individually, or any, several or all
of them, at the creditor's option. This situation applies to
tort-feasors as well as to commercial debtors. Persons who together
commit a tort and injure another person generally would be jointly
and severally liable for the damage. An injured person has the
option of suing the entire group or of suing the one having the
greatest financial strength.
1) An order given by a Court.
2) A debt resulting from a Court Order.
Common law, being based partly on decisions made in previous cases
and quotations from these earlier cases, supports the decision that
should be reached in any particular case presently before the
Court. These previously decided cases are known as
A body of persons selected from the general populace sworn to hear
evidence in a law case and to make a decision according to their
and Material Payment Bonds
Labour and Material Payment Bonds are issued in conjunction with
the Performance Bond, guaranteeing that the Contractor will pay all
his accounts arising from the project.
In construction, a bond on the general contractor to ensure
payment to subcontractors, labourers and suppliers; i.e., if the
general contractor does not pay, the surety will pay.
An insurance policy which, having reached its expiry date, is not
renewed or extended is said to have lapsed.
A defect which is not apparent. A hidden defect.
A contract by which one party, called the lessor, conveys to
another, called the lessee, real estate, equipment or facilities
for a specified term and for a specified rent.
Liability imposed by law on individuals or corporations to pay for
harm done to others. Such law may be the common law, statute law or
customs which over a period of time have taken on the same status
as law. Legal liability may also be assumed under the terms of a
One that holds real or personal property under a lease, e.g., a
tenant of rented premises.
One that conveys property by lease, e.g., a landlord of rented
Insurance which agrees to indemnify the insured for sums he may be
required by law to pay to third parties as damages for bodily
injury or damage to property.
The maximum amount of insurance provided under a policy of
liability insurance. There may be different limits for bodily
injury and property damage, or, more commonly, a single amount for
all claims for bodily injury or property damage arising from one
accident or occurrence.
Policies providing cover for claims arising from products
manufactured by the insured or arising from his completed
operations generally contain a further "aggregate limit" applicable
to these, imposing a maximum for all claims occurring during the
course of a single year.
Claims handling and adjusting expenses, costs of legal defense
and prejudgment interest are normally payable in addition to the
liability limits stated in the policy.
Insurance against claims arising from alleged libel, slander,
defamation of character, etc. Principally written for the
protection of those engaged in the publishing or advertising
fields, as well as TV or radio broadcasters. Also provided as an
extension to a liability policy as part of "personal injury" cover,
which also includes false arrest, malicious prosecution and
A charge upon real or personal property as security for some debt
or duty. Also, the security interest created by a mortgage. The
conditions of an insurance policy require the disclosure to the
insurer of any existing lien on the insured property.
Like Kind and Quality
Refers to replacement of damaged, destroyed or lost property with
used property of similar type and condition.
Limit of Liability
The maximum amount, as stated in the policy, which an insurer is
bound to pay in case of a loss. See also Liability
Insurance against loss (death) of horses, cattle, hogs, sheep,
dogs, etc. owned by the insured. The cover can be on an all risk or
a specified perils basis and includes loss by theft. The insurance
is usually written by specialist livestock insurers.
A word often used in place of the word "claim." It refers to the
amount an insurer must pay because one of the possibilities of loss
insured against under a policy, has happened.
Loss of Use
Cover against expenses incurred as a result of damage to the
property insured resulting in the need to replace the property on a
temporary basis. In automobile insurance this might refer to the
cost of a rental car while the insured vehicle is under repair as
the result of an accident. In a homeowner's policy it might refer
to additional living expense when the insured premises are rendered
uninhabitable by an insured peril.
Loss Payable Clause
A policy clause providing, at the direction of the insured, that in
the event of a loss, payment shall be made to an interested party
other than the insured, e.g., a mortgagee.
Injury to the rights or property of another with a wicked or
A performance by a professional which is deficient in skill from
what might ordinarily be expected of a professional person. The
standard of performance to which a professional person will be held
is necessarily higher than the standard which an unskilled person
would be expected to display.
Contractor's Liability Policy
A policy which provides coverage against the liability arising from
the ownership of property or the carrying out of operations. This
type of policy does not provide any coverage with respect to the
hazards of products or completed operations.
The value of an asset based on a current market valuation, e.g.,
the amount for which the item could be sold on the open
A form of construction identified by self-supporting walls of
masonry, e.g., brick, stone or hollow concrete block, but with
floors and roofs which may be constructed of combustible materials,
Something affecting a contract of insurance important enough to
change the agreement between the company and the policyholder.
Material facts must be disclosed if asked about. Failure to do so
may result in a voiding of the policy involved. An exception to
this general rule is that, with respect to ocean marine insurance,
all material facts must be disclosed whether the insurer asks the
appropriate question or not.
A provision in an insurance policy to pay certain specified medical
expenses of others irrespective of the insured's legal
Hazard or peril of a merchant in selling his stock of
Those goods which a commercial enterprise ordinarily sells to its
A system of rating in which the loss experience of a particular
risk is a factor in determining the rate for that
A person under the age of being legally capable of transacting
business on his own behalf.
An incorrect statement made about a material fact.
Misrepresentation can be innocent, e.g., arising from an oversight;
fraudulent (in other words, a deliberate untruth with intent to
deceive) or the result of extreme carelessness where a statement is
made without regard to whether it is true or false. When a
misrepresentation is discovered, the insurer may either continue
the contract or treat the contract as void with a full return of
any premiums paid. In order for the insurer to successfully treat a
policy as void, the misrepresented fact must be material to the
Money and Securities (Broad
A broad form of policy protecting against loss of money or
securities. There is no coverage for losses caused by, among other
things, employee infidelity.
A policy which is a combination of fire and casualty (or fire,
casualty and inland marine coverages) in a single contract such as
the Homeowner's Policy.
The disappearance of insured property in an unexplained manner. For
example, if a ring is left in a public place and the owner returns
later to find the ring gone, it is reasonable to assume that the
ring has been stolen. However, there is no direct evidence that
this is in fact what happened. This would be an example of
The person or party designated in the policy as the insured, as
opposed to someone who may be covered by the policy, but is not
Named Peril Policy
A policy in which the perils insured against are listed, as opposed
to one which insures against "all risks."
Failure to use the degree of care expected from a reasonable and
A contract of insurance is based on utmost good faith. An applicant
for insurance is required to disclose to the company all material
facts which are necessary to underwrite a policy. If the applicant
does not disclose all these facts, he/ she is guilty of
non-disclosure and may risk having coverage voided from
A risk for which no insurance can be written. The chance of loss is
very high or cannot be accurately measured.
A policy which protects the insured against third party claims
arising out of some other person using their own vehicle in the
business of the insured.
A person (usually a lawyer) appointed by the provincial
Lieutenant-Governor with the power of drawing and keeping Deeds and
of attesting protests of dishonoured negotiable instruments. This
person is also a Commissioner of Oaths before whom affidavits are
Notice of Loss
The conditions of the insurance policy require that any person
sustaining a loss insured by the policy shall immediately give
notice to the company of such loss. Failure to give notice as
required has been held to be a bar against recovery. The notice is
required to be in writing, and verbal notice to the agent or broker
will not be sufficient to comply with the condition.
The conditions of insurance policies stipulate how a policy may be
terminated during its term. For example, a policy may be terminated
by the insured at any time or by the insurer who must give the
insured a certain number of days' notice of termination by
registered mail or a certain lesser number of days' written notice
of termination personally delivered.
Null and Void
Of no legal or binding force; invalid.
A happening or event. Liability policies are usually written on
either an accident or occurrence basis. For coverage on an accident
basis, the loss or damage must be due to accident, whereas on an
occurrence basis all that is required is the happening or the
continual or repeated exposure to an unfavourable situation,
neither intended nor expected to cause injury or damage. In
reinsurance and insurance, it is also the grouping of related
losses into a single loss situation.
Off Premises Clause
A provision in residential policies affording coverage on some of
the household goods when away from the premises. within certain
The business of an Insured or the type of business of an
A clause in an insurance policy permitting the insured under
certain circumstances to have a choice of benefits.
In accident and health policies the insured may have a choice
of payment of various amounts as periodical indemnity for a certain
period of time or a lump sum settlement of a pre-determined amount
set out in the policy.
Normally an insured must disclose to an insurance company from whom
he is purchasing insurance, information about what insurance he
already carries on the property.
As a matter of principle, the insured should also advise
existing insurance carriers of new policies which he is taking out.
This is an essential point in the matter of
It is however frequently waived, as the more routine policies
carry some such wording as "other concurrent insurance permitted
without notice until required."
When two different kinds of policies cover the same loss, the
insurance is said to be "overlapping." This does not mean, for
example, when two fire insurance policies cover the same loss,
which is called "contributing insurance." However, if an inland
marine policy and a fire policy covered the same loss, they would
Owner's, Landlord's And
Liability insurance coverage which gives protection because of
liability arising out of ownership, use or occupancy; operation or
maintenance of buildings or premises.
Any insurance policy which covers two or more lines or types of
insurance in the same policy.
A loss covered by an insurance policy where the property or the
premises are not completely destroyed or rendered completely
A bond issued by a surety company which guarantees the client that
if the contractor fails to complete the project in accordance with
the terms of the construction agreement, the surety company will
either complete the contract itself, or arrange for a
client-approved contractor to complete the contract. The surety
company will pay the new contractor the amount required to finish
the work, minus the unpaid amount under the original contract.
However, the surety company is not obligated to pay more than the
penal sum or limit of liability stated in the bond.
Performance Bonds, issued after the contract is signed, provide
that the Contractor will complete the contract in accordance with
the plans and specifications.
The event that caused a loss covered by the policy, e.g., fire
Giving false evidence or information while under oath.
Insurance policy issued to individuals covering risks arising out
of the ownership or operation of a licensed
A policy covering personal effects usually carried by tourists. Can
be all risk or specified peril form. Covers worldwide but excludes
coverage at the insured's residence.
Injury other than bodily injury arising out of defined causes which
usually include false arrest or detention, malicious prosecution,
wrongful entry or eviction, libel or slander or violation of a
person's right to privacy other than in the course of advertising,
broadcasting, television, publishing.
Insurance for individuals and families, such as private passenger
auto insurance and homeowners policies.
Legally, any property of an insured other than real property. More
often used to refer to the personal property of family members
insured under a Homeowner's policy.
Personal Property Floater
A Broad Form policy covering all personal property worldwide
including at the insured's home, usually on an all risks
Provisions which state the rights and duties of the insured or
The maximum that the insurance company is obligated to pay in
actual claims under an insurance policy. Certain additional costs
may also need to be paid.
Statements contained in an insurance policy which explain the
benefits, conditions and other features of the insurance
Period between anniversary dates.
Individual or other entity who owns an insurance policy. The
Standard general liability policies include an exclusion for loss
arising out of pollution. For certain exposures this exclusion may
be modified. e.g., "sudden and accidental" pollution arising from a
Power of Attorney
Authority given one person or organization to act for and obligate
another to the extent of the instrument creating the
Any risk considered to be better than the average risk on which the
premium rate was based.
Building including the land immediately surrounding it and
belonging to it.
The price of insurance protection for a specified risk for a
specified period of time.
In law, a limitation of time within which legal action can be taken
by a claimant. In insurance, the period of time in which a claim
may be brought by the policyholder. Also Proscription.
The concept that an insured will be reimbursed for his loss
(subject only to the policy limit and terms). If there is no loss
there can be no indemnity.
Four-wheeled motor vehicles of the private passenger, station wagon
or van type, designed for use on public highways and subject to
motor vehicle registration.
Liability insurance, generally for contractors, for products
liability and for claims arising out of completed
Products & Completed
Liability insurance, generally for contractors, for product
liability and for claims arising out of completed
The legal exposure any Professional has acting in their capacity as
an expert in their given field. The Professional is held to a much
higher standard of care than a non-professional, and faces
significant liabilities in the execution of their chosen
Professional Liability Insurance (E&O
Insurance designed to cover the Errors or Omissions of the
Professional. Coverage is normally for financial loss, and has
numerous extensions depending on the insurer providing
Protects professionals against liability for damages and cost
of defense based upon his/her alleged or real professional errors
and omissions or mistakes, e.g., architects, engineers, medical
Proof of Loss
A formal statement made by a policy owner to an insurer regarding a
loss. It is intended to give information to the insurer to enable
it to determine the extent of its liability.
Property Damage Liability
Protection against liability for damage to the property of another
including loss of the use of the property.
Cancellation of an insurance policy or bond with the return premium
credit being the full proportion of premium for the unexpired term
of the policy.
Outside the time period in which a legal action can be commenced.
See also Prescription.
In fire insurance, a risk located in an area protected by a fire
Used interchangeably with "coverage" to denote insurance provided
under the terms of a policy.
Cause of loss or damage. Unbroken chain of cause and effect between
the occurrence of an insured peril and damage to
Damages in excess of those required to compensate the plaintiff for
the wrong done, which are imposed in order to punish the defendant
because of the particularly wanton or willful character of his
Amount or quantity.
An undertaking that is not a written contract but is an implied
contract. In insurance it is most frequently found in reference to
preservation of salvage.
The amount of premium that an insurer sets as the price to cover a