Lapse
Termination of a policy upon the policy owner's failure to pay the premium within the grace period.

Level Term Insurance
Term coverage on which the face value and premiums remain unchanged from the date the policy comes into force to the date the policy expires.

Liability
Your company’s legal liability for bodily injury and for damage to the property of others. Injury to your company's employees is excluded because this should be covered under Workers' Compensation insurance.

Limits
Most policies today provide a Combined Single Limit per accident for bodily injury and property damage liability. The other coverages are normally subject to separate limits.

Location
Standard property policies usually cover property at a fixed location. You should verify that all of your properties are listed in the policy. If you have property that is moved from place to place, such as construction equipment, your policy should be modified to reflect this. Policies can also be adjusted to cover property in transit and property at "unnamed" locations.

Long Term Leased Vehicles
Insurers will normally insure vehicles leased to your company under a long term lease as if they were owned by your company. Discuss this with your broker or insurer.

Medical
A document completed by a physician or another approved examiner and submitted to an insurer to supply medical evidence of insurability (or lack of insurability) or in relation to a claim.

Medical Examination
Usually conducted by a licensed physician; the medical report is part of the application, becomes part of the policy contract and is attached to the policy. A "non-medical" is a short-form medical report filled out by the agent. Various company rules, such as amount of insurance applied for or already in force; applicant's age, sex, past physical history; data revealed by inspection report, etc., determine whether the examination will be "medical" or "non-medical."

Medical Payments
Pays the medical bills of non-employees (for example, a guest falls on your premises) without actually establishing your legal liability. This coverage functions as a goodwill gesture, intended to avoid litigation.

Medical Payments - Automobile
A nominal sum to pay medical bills for guests injured while passengers in your company's car.

Misrepresentation
Act of making, issuing, circulating or causing to be issued or circulated an estimate, an illustration, a circular or a statement of any kind that does not represent the correct policy terms, dividends or share of surplus or the name or title for any policy or class of policies that does not in fact reflect its true nature.

Modification Factors
Policies in the higher premium ranges are subject to an "experience modification factor". This factor increases or decreases your premium based upon your company’s loss experience. Companies with adverse loss experience should seek specialized safety engineering expertise.

Monopolistic States
Six states require that Workers' Compensation insurance be purchased from the state. They are Nevada, North Dakota, Ohio, Washington, West Virginia and Wyoming. Monopolistic states do not include Employer’s Liability coverage with their policies.

Mortality
The relative incidence of death within a given group.

Mortgage Insurance
A basic use for life insurance, so-called because many family heads purchase insurance for specifically paying off any mortgage balance outstanding at their death. The insurance generally is made payable to a family beneficiary instead of to the mortgage holder.

Named Insured - Liability
Make certain that the name of your company is correct and that subsidiaries are shown as appropriate. If more than one name is listed, the policy commonly provides that the first named insured is authorized to negotiate changes in the coverage, to receive notice of cancellation on behalf of all other insureds, and is responsible for payment of premium (for all insureds). The order of listing is important.

Named Insured - Workers' Compensation
The named insured section should be reviewed periodically for accuracy and completeness.

Network Risk
Some carriers provide both income and liability protection to companies that make extensive use of network technologies in their business operations or in delivery of service to partners and/or customers. Coverage may include protection of a network-based revenue stream, including extra expense, or liability resulting from online media/publishing, network professional services, or a breach of network security resulting in vicarious or downstream liability.

• May provide coverage for claims alleging negligence in the provision of Internet services.
• May provide coverage for liability associated with a failure of network security.
• May provide coverage for liability associated with dissemination of electronic content.
• May provide coverage for Business Interruption due to certain nonphysical perils.
• May provide coverage for damage to one’s own intangible assets (i.e. code, data, etc.).
• May be endorsed to cover Misc. E&O.

Newly Acquired Property
Many policies provide a specified amount of coverage for newly acquired buildings and contents. You must report the acquisitions to the insurer within a specified number of days. Check your policy for details.

Non-Medical Insurance
Issued on a regular basis without requiring a regular medical examination. In passing on the risk, the company relies on the applicant's answers to questions regarding his or her physical condition and on personal references or inspection reports.

Non-Owned & Hired Automobile Liability
This coverage is normally provided by an Automobile Insurance Policy. Companies that do not own autos should have this endorsement added to their General Liability policy. This endorsement adds coverage for suits against your company resulting from the use of hired or non-owned vehicles by employees. For example, an employee is involved in an accident while using a personal car or rented car on company business. This coverage normally protects your company, but not the owner of the vehicle. The additional premium charge is usually small.

Non-Owned Aircraft Liability
This covers suits against your company arising out of the use of non-owned aircraft on company business. For example, an employee might use a personal or chartered aircraft on a business trip. Such policies typically protect your company, but not the aircraft owner. Many companies have a formal policy regulating the usage of non-owned aircraft by employees.

Non-Owned Watercraft Liability
Liability for bodily injury or property damage from the use of a non-owned watercraft (usually limited to boats under a specific length, such as 26 feet). For example, this coverage would respond to a suit for injury or damage if your company chartered a boat for business entertainment. Coverage protects your company, but not the owner of the watercraft.

Ocean Marine Insurance
Very specialized policies that cover ships and cargoes (including cargoes shipped by air). These are just some of the many endorsements or policies that are available to address your individual property insurance needs.

Offer and Acceptance
The offer may be made by the applicant by signing the application, paying the first premium and, if necessary, submitting to physical examination. Policy issuance, as applied for, constitutes acceptance by the company. Or the offer may be made by the company when no premium payment is submitted with the application. Premium payment on the offered policy then constitutes acceptance by the applicant.

Other Insured Rider
A term rider covering a family member other than the insured that is attached to the base policy covering the insured.

Other States
The policy should list all the states in which your company has employees. An employee, however, may be injured while temporarily in another state on business. The "Other States" Endorsement provides coverage for the possibility of a claim in another state. All states, except the Monopolistic states, should be covered by the Other States Endorsement.

Owners and Contractors Protective Liability (OCP)
OCP policies are written in connection with construction projects. The property owner or general contractor is usually the insured. The policy protects the insured from bodily injury and property damage liability arising out of: 1. Operations performed for the insured by the contractor or subcontractor designated in the policy at the location specified in the policy. 2. The insured’s acts or omissions in the general supervision of the designated contractor’s operations. Property owners request OCP policies to establish separate, specific liability coverage for their construction project, rather than relying solely on the contractor’s insurance policy.

Ownership
Property policies cover the property of a specific owner - the company named on the insurance policy. If there is a change in ownership, the policy must also be changed. If you have responsibility for property belonging to others (for example clothes in the possession of a dry cleaner) the policy should be amended to reflect this.

Perils
Perils are the causes of loss, such as fire or windstorm, that a policy covers. Property insurance can be written on a "Named Perils" basis, which means for specified types of perils. However, it is more common today to use an "All Risk" format (often called Special Form). "All Risk" means that the policy covers all risks of direct physical damage, except those specifically excluded in the policy.

Perils Excluded
Many insurers exclude Flood and Earthquake damage in their basic form, but will allow you to purchase coverage by endorsement. Insurers also exclude losses which they consider to be normal business expenses such as wear and tear or settling and expansion of foundations. Other exclusions can be addressed by adding an endorsement to the basic policy form, or by purchasing different types of property insurance. Boiler and Machinery Insurance and Crime Insurance are two such examples.

Personal Injury
Personal Injury includes unintentional slander, libel, false arrest or wrongful entry.

Physical Damage
Coverage for your company's vehicles. Collision coverage insures damage to your vehicles from collision or overturning. Comprehensive coverage covers other types of damage such as fire, theft or vandalism.

Policy Limits
A CGL policy shows several limits for the amounts of coverage. One limit is the most that will be paid for any one Occurrence. The General Aggregate limit is the most that will be paid for all claims (other than Products/Completed Operations liability) in one policy year. Product Liability and Completed Operations liability are usually subject to a separate aggregate limit. Medical Payments and Fire Damage Legal Liability have specific limits, commonly $5,000 and $50,000 respectively, which are part of the General Aggregate limit.

Policy Territory
Coverage is intended for operations within the United States, but coverage for some incidental foreign exposures is usually provided. If your company does business outside the U.S. you should discuss foreign liability coverage with your broker.

Pollutant Cleanup
Many property policies limit coverage for the cleanup of pollutants released in a covered property loss (e.g. your chemicals or other substances are spread by water used to put out a fire). The availability of higher limits should be explored if your company has an exposure to this type of loss.

Preferred Risk
A risk whose physical condition, occupation, mode of living and other characteristics indicate a prospect for longevity superior to that of the average longevity of unimpaired lives of the same age. (See standard risk.)

Premises and Operations
Premises and Operations includes liability arising from the insured location and its operations.

Premium
The periodic payment required to keep an insurance policy in force.

Primary Beneficiary
In life insurance, the beneficiary designated by the insured as the first to receive policy benefits.

Proceeds
Net amount of money payable by the company at the insured's death or at policy maturity.

Products/Completed Operations
Liability for injury or damage caused by your products or by your completed work.

Professional Liability
These policies afford coverage to a wide range of professionals - Architects, Engineers, Lawyers, Accountants and Doctors are examples. Publishers also purchase this type of coverage. Professional Liability insurance covers errors and omissions in the performance of professional duties. This is a very important coverage for anyone acting in a professional capacity. Most Professional Liability policies are written on a "Claims-Made" basis. This means that the policies respond to claims made while the policy is in force (or during the Extended Reporting Period). Claims reporting requirements should be thoroughly reviewed.

Property Excluded
Below are a few types of property that are either excluded from coverage or subject to limitations in many policies: Accounts, bills, money, deeds, evidence of debt, fine arts, jewelry, precious stones, precious metals, animals, land, crops and plants. If your company has significant amounts of such property, be sure to discuss this with us.