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Aggregate
Deductible
Deductibles may be either “per claim” or “aggregate”. With a
“per claim” deductible your deductible will apply to each and
every claim. With the annual aggregate deductible feature, the
insured's exposure for deductible expenses is capped at a
specific amount. As soon as one, or more, claim/s erode the
deductible amount, the carrier then pays loss and expenses up to
the policy limit.
Broker of Record
Letter (BOR)
A letter executed by an insured appointing a new broker.
This letter is usually addressed to the insurance carrier with a
copy to both the incumbent and newly appointed broker.
Co-Pay(ment)/Co-insurance
Obligation
The amount the insured pays in addition to the deductible of
any judgment or settlement. This co-payment is usually a
percentage of the loss and can apply differently depending upon
the type of coverage involved.
Defense Costs
The costs associated with the defense of a claim against the
firm. In most policy forms, defense costs are part of and not in
addition to the limits of liability. In other words, defense
costs erode the available limit of liability that are available
to pay actual damages. Defense cost may include attorney fees,
investigation, etc.
Defense Costs In
Addition or Outside the Limit of Liability
Sometimes referred to as Claim Expenses Outside the Limit (CEOL).
Costs to defend a claim do not reduce the limit of liability and
are paid above and beyond the policy limits.
Defense Costs
Inside the Limit of Liability
Sometimes referred to as Claim Expenses Inside the Limit
(CEIL). Costs to defend a claim reduce the limit of liability
that will be left to pay actual damages.
Directors' and
Officers' Liability Insurance (D&O)
Under common
law the director owes the fiduciary duties of diligence,
loyalty, and obedience to the corporation and its shareholders.
D&O insurance protects an individual serving in this capacity
against claims for allegations of failing to perform within
their directed capacity.
Disciplinary
Coverage
This feature can provide for a sub-limit (oftentimes $5,000
or $10,000) to pay for the defense of an insured during a
disciplinary proceeding. Usually the deductible does not apply
to disciplinary defense coverage and such limits may not erode
the overall policy limits. Policies vary greatly in regard to
this feature.
Employment
Practices Liability Insurance (EPLI)
EPLI protects
businesses against legal defense expenses and damages resulting
from wrongful employment practices including discrimination,
sexual harassment, wrongful termination and other related
workplace issues.
Employee
Dishonesty Insurance
Sometimes referred to as a Fidelity Bond. This insurance
protects the employer from financial loss due to the fraudulent
activities of an employee or group of employees. The loss can be
the result of the employee’s theft of money, securities or other
property of the employer. Policies may be extended to provide
“crime coverage” for non-employees.
ERISA Bond
An
ERISA Bond protects plan assets from dishonest acts of those who
handle the plan. ERISA requires that each fiduciary of employee
benefit plan be bonded. Each ERISA (Fidelity Bond) must meet the
following criteria:
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The bond must be
equal to 10 percent of the plans assets at the start of the
plans fiscal year not less than $1,000 and not greater than
$500,000 ($1,000,000 for companies that offer company stock)
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If more than one
plan is covered under a single bond, the bond must allow for
recovery by each plan in the amount that would be required
if an individual bond was purchased.
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The bond must
cover the plan against loss of assets due to fraud or
dishonesty on the part of a plan administrator, trustee,
officer, or employee.
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The bond must provide coverage from first dollar. No
deductibles are permitted
Extended Reporting
Period (ERP)
Also referred to as "tail" coverage. This feature extends
the period in which a claim may be made for work done that was
performed prior to the expiration date of coverage. There is an
additional premium charged for this benefit and the time periods
for which coverage may be extended vary from carrier to carrier.
Some carriers only offer this benefit if the carrier cancels or
non-renews the policy for reasons other than non-payment of
premium (usually cdralled "a one-way tail").
Fidelity Bond
See Employee
Dishonesty. A Fidelity bond protects for the dishonest acts of
employees.
Fiduciary
Liability Insurance
A fiduciary liability
policy protects the personal assets of a plan Fiduciary due to
allegations of breach of fiduciary duties. This is first party
insurance and is purchased by the plan sponsor. It provides
coverage for the plan and fiduciaries of the plan.
First Dollar
Defense or Loss Only Deductible
The deductible only applies to an actual loss, judgment or
settlement. In other words, from the very first dollar spent
defending the matter, the carrier is paying for such defense
expenses. The deductible would not apply to the cost of defense,
only actual damages.
Innocent Partner
Coverage
Whenever coverage would have been excluded or otherwise lost
due to concealment of a claim by any insured, this feature
provides coverage to each insured who did not personally
conceal, commit or participate in the wrongful acts from which
the concealed claim arose. There are, of course, limitations to
this feature and each policy clearly outlines this benefit if it
is offered.
Minimum Earned
Premium
Once coverage is bound, a minimum earned premium is the
amount of premium actually earned even if the policy is
immediately canceled by the named insured.
Personal Injury
Coverage
The definition of what constitutes a "personal injury"
covered under any policy varies from company to company and
coverage form to coverage form. It is usually meant to include,
but may not be limited to, coverage while acting on behalf of
the firm for libel, slander, defamation, disparagement,
malicious prosecution or abuse of process, false arrest,
detention or imprisonment, wrongful entry, wrongful eviction, or
any invasion or breach of privacy or the right of private
occupancy.
Prior Acts
Coverage
Also referred to as a Retroactive date. This is a
stipulated date usually shown on the Declarations Page of a
claims-made policy. It means no claim is covered by the policy
if it is based upon or arises from any wrongful act which
occurred prior to the stipulated date.
Retention/Self-Insured Retention
The amount the insured assumes of any loss and can include
the cost of defense. It is similar to a deductible; however, the
limit of liability of the policy is usually excess over the
retention amount.
Retroactive Date
See Prior Acts date
Surplus Lines
Taxes and Fees
These are taxes and fees imposed by a State to an insurance
carrier that is not "admitted" to do business in that state, or
in other words, it is a "non-admitted carrier." |
