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Commercial UW AU60
Commercial Underwriting Principles Assgnt 4 of 8
| Term | Definition |
|---|---|
| Sole proprietorship | A form of business in which one person owns the business assets and is personally liable for the business's debts. |
| Unlimited liability | The liability that exists in sole proprietorships and certain partnerships; if the business becomes bankrupt, creditors can seize business and personal assets to satisfy claims. |
| Partnership | A for-profit business entity jointly owned by two or more persons who share ownership and profits (or losses), although not necessarily on an equal basis. |
| General partnership | A partnership in which each partner assumes unlimited joint liability for all the partnership debts. |
| Limited partnership | A form of partnership made up of one or more general partners, who have unlimited liability, and one or more limited partners, whose liability is limited to the amount of capital they have contributed to the partnership. |
| Silent partner | A partner who invests in a partnership and is known to the public but takes no active role in the business. |
| Secret partner | a general partner who is active in a business but who is not known to the public. |
| Dormant partner | A partner who is neither known to the public nor active in the business. |
| Nominal partner | An individual who lends expertise or experience to a partnership but has no investment in the partnership and is not a true partner. |
| Articles of partnership | A legal document that specifies each partner's financial and managerial responsibilities toward one another. |
| Corporation | An entity organized under law and entitled to the same rights as a person, distinct from its owners. |
| Board of directors | The controlling entity of a corporation, elected by stockholders. |
| Corporate charter (articles of incorporation) | A document prepared during the formation of a corporation stating the corporation's goals and objectives and the kind of business for which the corporation was organized. |
| Professional service corporation | A corporation formed under a statue that allows an individual or a group of individuals who render the same type of professional service to the public to incorporate. |
| Limited liability company (LLC) | A form of business entity that provides its owners the limited liability of a corporation and the tax advantages of a partnership. |
| Unincorporated association | A voluntary association of individuals acting together under a common name to accomplish a lawful purpose. |
| Named insured | A person, corporation, partnership, or other entity identified as an insured party in an insurance policy's declarations page. |
| Wrap-up | A risk management program for large construction projects in which the sponsor selects coverages for all contractors and subcontractors working on the project, enabling participating contractors to reduce their bid by the cost of the coverage it provides. |
| Employment | A condition in which one person agrees to provide services for another in return for wages or some other form of consideration. |
| Contract of hire | The agreement between an employer and employee to assume an employment relationship from which both parties reasonably expect to derive some benefit; may be express or implied. |
| Employer | A person who hires another person (employee) to perform services and under whose direction and control that person functions. |
| Professional employer organization (PEO) | A company that leases workers to small or medium-sized client companies to supply the client's permanent workforce, making the client an indirect employer; these relationships create insurance implications related to employee status. |
| General contractor | An independent contractor who obtains the primary contract for a project and either completes all work or subcontracts portions (or all) of the work to other independent contractors who specialize in such work. |
| Subcontractor (specialty contractor) | An independent contractor who specializes in a particular kind of work and who is engaged by a general contractor to perform a particular portion of the general contractor's contract. |
Created by:
lorrainel007
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