Back to Top

(888) 360-SNOW




Abutting Coverage When you have two or more policies providing the same coverage at the same time.

Accident Control Inspection and engineering work done to help remove potential causes of loss. Loss prevention is also referred to as safety engineering, accident prevention, accident control, or loss prevention.

Actual Cash Value (ACV) "Actual Cash Value" is the replacement cost of property damaged or destroyed at the time of loss, with deduction for depreciation. Actual cash value cannot exceed the applicable limit of liability shown in the declarations of the policy, nor the amount it would cost to repair or replace such property with material of like kind and quality within a reasonable amount of time after a loss.

Additional Insured An individual or entity that is not automatically included as an insured under the policy of another, but for whom the named insured's policy provides a certain degree of protection. An endorsement is typically required to effect additional insured status. The named insured's impetus for providing additional insured status to others may be a desire to protect the other party because of a close relationship with that party (e.g., employees or members of an insured club) or to comply with a contractual agreement requiring the named insured to do so (e.g., customers or owners of property leased by the named insured).

Additional Named Insured An individual or entity, other than the first named insured, identified as an insured in the policy declarations or an addendum to the policy declarations. An individual or entity who is added to a policy with the status of named insured after the policy is written. Such an individual or entity would have the same rights and responsibilities as an individual or entity named as an insured in the policy declarations (other than those rights and responsibilities reserved to the first named insured). In this sense the term can be contrasted with additional insured, an individual or entity added to a policy as an insured but not as a named insured. The term additional named insured has not acquired a uniformly agreed-upon meaning within the insurance industry, and use of the term in the two different senses defined above often produces confusion in requests for additional insured status between contracting parties.

Advertising Injury Liability Coverage "Advertising Injury" means injury rising out of an offense committed in the course of your advertising activities, if such injury rises out of libel, slander, defamation, violation of right of privacy, piracy, unfair competition or infringement of copyright, title or slogan.

Aggregate A limit in an insurance policy stipulating the most it will pay for all covered losses sustained during a specified period of time, usually one year. Aggregate limits are commonly included in liability policies. While not often used in property insurance, aggregates are sometimes included with respect to certain catastrophic exposures, e.g., earthquake and flood.

The dollar amount of reinsurance coverage during one specified period, usually 12 months, for all reinsurance losses sustained under a treaty during such period.

Assigned Risk A method to provide insurance to the uninsurable. In mandatory insurance states, everyone must have insurance regardless of their risk or record. These states require that each company writing insurance in their state must take a number of clients that they would not insure otherwise.

Basic Limits The minimum limits of liability as required by state or local law. Beneficial Interest Denotes someone who is not necessarily the insured on a property policy but has a financial interest in the property (i.e. they would benefit from any insurance on the property). Beneficiary The person or persons named to receive the benefits (payout) from a life insurance policy. Binder A binder is a legal agreement that serves to effect insurance coverage for a specified period of time until the actual insurance policy can be issued. A binder can be issued by either an insurance agent or company and must provide the following information: Name of insured Type of insurance coverage Limits of insurance Covered perils Name of insurance company Blanket Coverage For property insurance, a blanket sets a single limit (maximum payout) for multiple buildings or risks. For health insurance, a blanket covers an entire group for a list of coverages (i.e. medical, dental, etc.). Blanket Insurance Blanket insurance provides coverage under a single limit for the following: Two or more items (e.g., Building and/or Contents) Two or more locations (e.g., Location A and/or Location B) A combination of items and/or locations Bodily Injury Coverage "Bodily injury" is defined as meaning bodily harm, sickness, or disease, including required care, loss of services, and death that results.

Cancellation The end of an insurance policy. Usually applied to the premature ending of the policy for nonpayment but may be used to describe the ending of any insurance policy.

Captive Insurance Company A captive insurance company is an insurance company that has been set up to provide coverage at a lower cost than available by going through the general insurance market. The company's stock is controlled by one interest or a group of related interests so as to provide coverage for their business operations. A captive insurance company may be a nonadmitted, nonresident, or foreign insurer. Sometimes it may provide reinsurance to a self-insure or a domestic company.

Certificate of Insurance An official document created by an insurance carrier or agent to prove insurance coverage to a third party.

Claim The formal request by a policy holder or claimant to be paid under the terms of the insurance policy.

Claims Made A method of providing liability insurance in which the insurer agrees to cover all claims asserted against the insured during a specified date period regardless of when the claim occurred. All claims-made policies have a "retro" date which specifies the beginning date for claims to be considered.

Commercial General Liability Coverage (CGL) An all encompassing type of insurance policy which covers all liability exposures for all locations and causes of loss except those specifically excluded in the policy.

Completed Operations Liability Coverage This form of liability insurance provides coverage for bodily injury and property damage rising from completed or abandoned operations, provided the incident occurs away from premises owned or rented by the insured.

Operations are deemed completed at the earliest of the following items:

  • When all operations to be performed by or on behalf of the insured under contract have been completed.

  • When all operations to be performed by or on behalf of the insured at the site of the operations have been completed.

  • When the portion of work out of which injury or damage rises has been put to its intended use by a party other than the contractor or subcontractor.

  • Comprehensive General Liability Coverage Under this form of insurance and regarding a covered occurrence, the company will pay all sums the insured becomes legally obligated to pay as damages due to:

      Bodily injury (Coverage A)

      Property damage (Coverage B)

    The insurance company has the right to defend any suit against the insured seeking damages for bodily injury or property damage, even if any of the allegations of suit are groundless, false, or fraudulent, and to make such investigation and settlement of any claim or suit as it deems expedient. However, the company is not obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payments of judgments or settlements.

    Consequential Loss or Damage Consequential loss or damage -- as opposed to direct loss or damage -- is indirect loss or damage resulting from loss or damage caused by a covered peril, such as fire or windstorm. In the case of loss caused where windstorm is a covered peril, if a tree is blown down and cuts electricity used to power a freezer and the food in the freezer spoils, iIf the insurance policy extends coverage for consequential loss or damage then the food spoilage would be a covered loss. Business Interruption insurance, extends consequential loss or damage coverage for such items as extra expenses, rental value, profits and commissions, etc.

    Contents Contents includes just about anything in the home (including garage and outbuildings) belonging to the policyholder or a member of his family living in the same house, or to resident domestic servants. It also includes property, which is not owned by the policyholder but for which he is responsible, such as rented property. Furniture, furnishings, household goods, electrical appliances, food and drink, clothes, and money up to a specified limit all count as 'contents'. Also included are movable fixtures and fittings, for example, special lighting fittings which would be taken away on removal. Fittings, which would be left in the house, such as built-in furniture, count as part of the 'buildings', although fitted carpets are classed as 'contents'. Certain types of property are excluded. The cover applies principally to contents actually inside the home, although there is some cover under a 'standard' policy for contents temporarily away from the home. Some policies also include theft of household contents from the garden or immediate vicinity of the home.

    Contractors' Liability Coverage


    The "premises" portion of your liability insurance provides for payment on your behalf of all sums you become legally obligated to pay as damages resulting from bodily injury and/or property damage caused by an insured peril and rising out of the ownership, maintenance, or use of premises and your operations in progress. The "operations" portion of your liability insurance covers operations in progress and is intended for situations where your principal business operations are performed away from your premises.

      Completed Operations

    This portion of your liability insurance covers you for possible liability for bodily injury and/or property damage after your work is complete and you have left the job site.

    Contractors' Protective Liability Coverage This insurance coverage provides for payment on behalf of the insured of all damages the insured becomes legally obligated to pay due to bodily injury or property damage caused by an occurrence rising from the following: Operations performed for the named insured by independent contractors. Acts or omissions of the named insured in connection with his/her general supervision of such operations. This does not include maintenance and repair at premises owned by or rented to the named insured, or structural alterations at such premises that do not involve changing the size of or moving buildings or other structures. Contractual Liability Coverage It is common in construction and other agreements (written or oral) for one party to "assume" the liability of another. This is sometimes referred to as a "hold harmless" agreement. The extent to which one holds another harmless varies from contract to contract, job to job, etc.

    To assume the liability of another, regardless of extent, is a voluntary undertaking which increases your exposure to loss. A standard Commercial General Liability policy does cover this additional exposure subject to certain exclusions. Cross Liability Coverage In the event of claim by one insured for which another insured covered by the same policy may be held liable, this endorsement covers the insured against whom the claim is made in the same manner as if separate policies had been issued. However, it does not operate to increase the insurance company's overall limit of liability.

    Debris Removal Clause This pays for the insured's expenses to remove debris of covered property caused by a Covered Cause of loss. This does not include "pollutants" and must occur during the policy period and reported within 180 days of the occurrence.

    Deductible An excluded amount or threshold for payment on an insurance policy. A $500 deductible would mean the insurance policy will start paying after they have deducted the first $500 the owe you.

    Earned Premium The amount of the policy premium used at the time of a cancellation or expiration relative to the policy term. For example, if the policy term is one year then the earned premium at the six month point is 50% of the total premium. This is not an indicator of how much you'll get back if you cancel the policy because the total premium was partially based on the term.

    Effective Date The first day of a policy term. Denotes the beginning of the insurance coverage.

    Endorsement A document which changes or alters the basic insurance policy.

    Equipment Floater Covers various kinds of equipment against all potential risks.

    Excess Coverage A type of insurance which covers all or a portion of a loss which exceeds an agreed amount. Excess policies usually do not come in to effect until the primary insurance limit has been reached. Excess policies provide higher limits and offer protection against very large losses.

    General Aggregate Limit The total amount that will ever be paid by an insurance policy regardless of the number of claims made against it.

    Indemnification When insurance policies are written on an "indemnification" basis, the insurance company will reimburse the insured for claim costs already paid. Technically, the insured must not only suffer a loss, but must also pay the loss before being reimbursed (indemnified) by the company.

    Indemnify To reimburse or otherwise pay for an incurred loss.

    Indemnity Making whole. The act of reimbursing or otherwise paying an injured party for an incurred loss. In life insurance, the amount paid to the beneficiary is referred to as indemnity.

    Independent Agent An insurance agent that is affiliated with more than a single insurance company. An independent agent is able to shop several insurance carriers for the best plan for a particular insured.

    Insurance A contract by which one undertakes to indemnify another or to pay a specified amount upon determinable contingencies.

    Insurance Audit Sometimes factors that enter into determining appropriate premiums for insurance coverage can't be known in advance; therefore, accurate premiums for the coverage provided can't be billed by the insurance carrier. This often is true in the case of Worker's Compensation and Product Liability insurance, where such things as payroll and sales can't be determined ahead of time. An audit serves as an examination of the insured's records after the fact to adjust the initial premium billed to reflect the actual coverage.

    Insurance Fraud Insurance fraud is any act or omission with the purpose of illegally obtaining a property and casualty insurance benefit. This definition encompasses the full range of fraudulent acts, from completely fabricated claims, to inflation or padding of legitimate claims, to false statements on insurance applications, to internal fraud.

    Lapse Typically used in life insurance to indicate the termination of a policy.

    Layering A technique to obtain very high limits of insurance or to insure high risk items for reasonable prices by purchasing layers of insurance. The first or primary layer picks up all normal losses with secondary layers coming in to play when the limits of the first layer are exceeded. Secondary layers are typically less expensive that buying the needed limit from the primary layer.

    Liability Coverage Insurance for your screw ups. A liability insurance policy will pay up to a stated limit for events resulting from the insured's negligence. A liability policy will also usually pay for property damage and medical expenses incurred by the injured party.

    Limit The maximum amount to be paid by an insurance policy. Many policies have split limits meaning they'll pay one amount per person and another amount per accident. A third split may be included to indicate the maximum amount the policy will ever pay regardless of the number of people or accidents.

    Loss Control Inspection and engineering work done to help remove potential causes of loss. Loss prevention is also referred to as safety engineering, accident prevention, accident control, loss control or loss prevention.

    Loss of Use Coverage Loss of Use is an extra expense you incur while staying at a temporary location if your condo or home becomes uninhabitable. While most policies allow a limited dollar amount for this coverage.

    Manuscript Policy An insurance policy specifically designed for an individual insured (handwritten inference).

    Maximum Possible Loss (MPL) A formal estimate of the the maximum dollar amount at risk by the company or companies providing an insurance policy.

    Medical Payments A general liability coverage in which the insurer reimburses without regard to the insured's liability, the insured and others (as specifically provided in the policy) for medical and funeral expenses incurred by such persons as a result of bodily injury or death sustained by accident under the conditions specified in the policy.

    Mutual Insurance Company An insurance carrier or provider which is owned exclusively by its insureds. A mutual insurance company has no stock. Any operating profit is paid to their insureds in the form of a premium rebate.

    Named Insured The person or persons designated as the insured in an insurance policy.

    Named Perils Insurance An insurance policy which covers only defined perils or causes of loss. This is the opposite of an All-Risk policy which covers all perils except those specifically excluded.

    Nonadmitted Carrier An insurer not licensed to write insurance in a specific state.

    Nonrenewal When an insurance company decides it will not provide you insurance anymore.

    Occurrence (CGL) This term means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.

    Occurrence Policy A type of liability policy in which a insurance provider is liable for any claim which occurred during the policy period regardless of how far in to the past it occurred. This is the traditional type of liability policy but has lost favor because of lawsuits being brought years after the fact. Large liability risks are typically covered by claims-made policies which are responsible only for claims submitted during the covered policy period.

    Peril The cause of a loss. Examples of perils are fire, wind, an accident and acts of vandalism.

    Personal Injury Liability Coverage This insurance coverage protects against false arrest, detention or imprisonment, or malicious prosecution; libel, slander, defamation, or violation of right of privacy; and wrongful entry, eviction, or other invasion of right of private occupancy.

    Pleasure Use A term used to indicate a vehicle is not used for any business purpose other than driving to and from work. Required to obtain private passenger automobile insurance.

    Policy A formal contract outlining the terms and conditions of the insurance provided by an insurance carrier.

    Pre-Existing Condition Injury from an accident or sickness which occurred, began or was diagnosed before the insurance policy was in effect are pre-existing conditions and may be excluded from coverage.

    Premium The amount you are asked to pay for an insurance policy.

    Property Damage Liability Coverage Protects against loss caused by your negligent damage of someone else's property.

    Protective Liability Coverage Protects against claims arising from a secondary cause such as a business being sued due to the actions of an employee.

    Punitive Damages Punitive damages are awarded in civil law suits to discourage intentional wrongdoing, wanton and reckless misconduct and outrageous behavior. The majority of courts in the United States, including those of New York hold that punitive damages are not compensation for injury, but, instead, are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence.

    Rate Filing How an insurance carrier arrives at a premium for a particular type of insurance policy must be on file with each state. This guarantees that certain areas or people are not denied coverage. Some states require that rates must be filed before they can be used, others are just want to be notified.

    Redlining The act of marking a geographical area as unsuitable for insurance (think of a red line on a map). This is typically illegal because it is considered unfair discrimination to exclude a blighted area.

    Reinstatement This has two meanings: 1. The restoration or continuation of an insurance policy that was cancelled or suspended for a portion of the policy period or, 2. The restarting of a policy limit after a claim. This is normally associated with fire coverage which commonly restarts the limit after it has paid out.

    Renewal A new policy which replaces one that is expiring or cancelled.

    Return Premium The amount of premium that is returned to you by an insurance carrier after a policy is cancelled during the policy period.

    Risk What makes you buy insurance. It is anything you don’t want to lose or have damaged including yourself.

    Risk Manager The entity in charge of identifying, evaluating and managing the potential perils facing a risk.

    Schedule In insurance, a schedule is a list attached to a policy. A jewelry schedule is a list of jewelry you own that is covered by an insurance policy. A vehicle schedule is a list of vehicles attached to and covered by an insurance policy.

    Specified Perils An insurance policy which only covers causes of loss or perils specified in the policy.

    Subrogation In insurance, the process where an insurance carrier negotiates in behalf of the insured to settle a claim the carrier is liable for.

    Surplus Lines Insurance Insurance placed with carriers not licensed in the same state as the risk. Surplus lines laws differ in each state but generally require that the insured attempt to place the insurance with a licensed carrier before using a surplus lines carrier. Proof of this placement attempt is also typically required.

    Surplus Lines Tax A tax paid by the insured on insurance placed with surplus lines carriers. It is collected by the agent and paid to the state.

    Tail In insurance, a tail refers to claims and losses that have not yet been reported or discovered.

    Terrorist Coverage Protects against damage caused by acts of terrorism.

    Tort A tort is an unintentional violation of another person's rights, usually due to negligence. It is different than a crime, which generally is an intentional violation of another's rights. A tort is subject to civil action and subsequent judgement for damages payable to the wronged party, whereas a crime is subject to criminal action and subsequent penalty.

    Umbrella Liability Coverage This type of liability insurance provides excess liability protection. Your business needs this coverage for the following three reasons:

    Underlying Limits Associated with excess and umbrella coverages. Refers to the limit of the primary policy and where the umbrella or excess coverage begins. Most excess and umbrella policies have a required underlying limit.

    Unearned Premium The amount of the unused policy premium at the time of a cancellation or expiration relative to the policy term. For example, if the policy term is one year then the unearned premium at the six month point is 50% of the total premium. This is not an indicator of how much you'll get back if you cancel the policy because the total premium was partially based on the term.