Glossary

Glossary of Insurance Terms

Accounts Receivable

Accounts receivable insurance provides coverage when business records are destroyed by an insured peril and the business cannot collect money owed. The policy generally covers these uncollectible sums plus the expense of records reconstuction and extra collection fees. Usually it does not insure the physical value of the records themselves such as the paper or computer disks and tapes.

Actual Cash Value (ACV)

The cost to repair or replace the damaged or destroyed personal property at the time of the loss, with material of like kind and quality, less depreciation of the damaged personal property. Generally, 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 of replace such property with material of like kind and quatity within a reasonable amount of time after a loss.

Additional Insured

An insured who is not an insured under the provisions of a policy, or listed in the declarations as an insured, but who is endorsed on to a policy as an additional insured. 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 disire to protect the other party because of a close relationship with that party or to comply with lease or other contractual agreement requiring the named insured to do so.

Advertising Injury

Injury arising out of an offense committed in the course of an insured's advertising activities, if such injury arises out of advertising activities for libel, slander, defamation, violation of right of privacy, piracy, unfair competion, or infringement of copyright title or slogan.

Agreed Amount

Sets the maximum limit the insurance company will pay and waives any co-insurance requirement on the specific property in the event of a covered loss.

All Risk Form

Provides coverage for all risk physical loss, except those that are specificly exclusded in the policy. The policy's exclusions and conditions must be considered in determining coverage.

Bailee

An individual or entity that holds propety of another. An example would be dry cleaners, jewelers, repairers.

Blanket additional Insured

An insured party that is covered under the policy of another by a Blanket Additional Insured Endorsement. In general, this endorsement extends the policy to include any persons or organizations that the named insured is required to to add as an additional insured under a written contract or agreement that is in effect or becomes effective during the term of the policy, subject to the limitations and exclusions set forth in the Blanket Additional Insured Endorsement itself.

Blanket Limit

Provides coverage for real property under a single limit by combining the values at all property locations to obtain one blanket limit for all the property, or in the case of personal property, provides a single limit for two of more items.

Bodily Injury

Covers bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

Boiler & Machinery

Coverage for arising out to the operation of pressure, mechanical , and electrical equipment. Coverage loss of the objects such as steam boilers, certain types of machinery such as compressors, heating, cooling, power generating or power driven machinery and equipment, resulting from accidents such as explosion, cracking or bulging, mechanical breakdown, electrical burnout or off premises power failure. Coverage may also apply to the resulting damage to buildings, contents and property of others in your care for which you are legally responsible. (Also known as: Comprehensive Equipment Coverage).

Broad Form Products

Modifies the policy exclusion relating to “Insured Product” to apply only to the malfunctioning part, not the entire vehicle.

Building Ordinance Coverage

Covers loss due to demolition and increased cost of construction due to loss by a covered peril if the demolition and increased cost of construction is required by law or ordinance.

Buildings (Real Property)

Coverage designed for specified buildings and improvements that you own, or are required to insure by reason of contract.

Business Income/Extra Expense

Covers loss of income and continuing expenses, such as payroll, mortgage payments and taxes, in the event your business is shut down or disrupted because of a loss by a covered peril to buildings or contents. Also includes loss of rental income for owners of tenant occupied property or for a tenant whose lease requires continuation of rental payments in the event of damage to such property by an insured peril, and the extra costs involved in continuing as nearly as possible, the normal operation of the business.