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Commercial Lines 101
Insurance Definition Part 2
| Term | Definition |
|---|---|
| All Risk Coverage | Policies that provide coverage for any peril except those that are specifically excluded |
| Fiduciary Responsibility | The obligation that one party has in relationship with another one to act entirely on the other party's behalf and best interest |
| Hazard | Conditions that increase the probability of loss |
| Insurance Agent | A person or organization who/that solicits, negotiates, or initiates insurance contracts on behalf of an insurer and can be independent or an employee of an insurer |
| Insurance Broker | An insurance intermediary ( go-between) that represents the insured rather than the insurer |
| Insurer | Insurance company that undertakes to indemnify for losses and perform other insurance-related operations |
| Intentional Acts | An act committed with the purpose of injuring someone or damaging another's property |
| Loss | The basis of a claim for damages under the terms of a policy and loss of assets resulting from a "pure risk" |
| Moral Hazard | Concerns intentional acts committed by the insured that either create or exaggerate a loss to receive claim payment |
| Morale Hazard | Implies a certain indifference to loss simply because of the existence of insurance |
| Named Perils Coverage | Policies that provide coverage only for loss caused by the perils specifically listed as covered |
| Negligence | The failure to use a reasonable degree of care under a given set of circumstances |
| Peril | Cause of loss |
| Physical hazard | Material, structural, or operational features of a business that may create or increase the opportunity for injury or damage |
| Pure Risk | The risk involved in situations that present the opportunity for loss, but no opportunity for gain |
| Reinsurance | Transaction in which one party, the "reinsurer", in consideration of a premium paid to it, agrees to indemnify another party, the "reinsured", for part or all of the liability assumed by the reinsured under a policy it has issued. |
| Risk | Uncertainty arising from the possible occurrence of events |
| Risk Classification | Defined classes based on the probability of loss |
| Speculative Risk | Uncertainty about an event under consideration that could produce either a profit or loss |
| Strict Liability | A legal doctrine that holds a party responsible for their actions or products, regardless of fault |
| Tort | A civil or private wrong giving rise to legal liability |
Created by:
jcmartinez,jm4
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