Insurance Definitions

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C & F:   A sale term relating to goods. Cost and Freight. The consignee makes his own insurance arrangements for the goods throughout the period of transit.

CANCELABLE POLICY:  A policy which may be terminated by the company or the insured by proper notification sent to the other party according to terms set forth in the policy.

CARRIER:  (1) An insurance company which "carries" the insurance. (The terms "insurance company" or "insurer" are preferred because of the possible confusion of "carrier" with transportation terminology). (2) In transportation, the trucker, air carrier, ocean steamship company or other entity which moves the goods. (See "Contract Carrier)

CASH SURRENDER VALUE:  Money the policyholder is entitled to receive from the insurance company upon surrendering a life insurance policy containing a cash value clause.

CASUALTY INSURANCE:  That type of insurance that is primarily concerned with losses caused by injuries to persons and legal liability imposed for such injury or for damage to property of others. It also includes such diverse forms as Plate Glass, insurance against crime, such as robbery, burglary or forgery, Boiler and Machinery insurance, and Aviation insurance. Many casualty companies also write surety business.

CAUSES OF LOSS:  Under the latest commercial property forms, this term replaces the earlier term "perils" insured against.

CLAIM:  (1) A formal request for payment of a loss under an insurance contract or bond; (2) The actual amount of the final settlement.

CLAIMANT:  One who seeks reimbursement for loss under the terms and conditions of the insurance contract.

CLAIMS-MADE COVERAGE:  A policy providing liability coverage only if a written claim is made during the policy period or any applicable extended reporting period. For example, a claim made in the current reporting year could be charged against the current policy even if the injury or loss occurred many years in the past. If the policy has a retroactive date, an occurrence prior to that date is not covered. (Contrast this with "Occurrence Coverage)

CLASSIFICATION CLAUSE (CARGO):   A clause in a cargo insurance open cover which details the minimum classification for an overseas carrying vessel that is acceptable to the insurers for carriage of the insured goods at the premium rate/s agreed in the contract. Goods carried by lower class vessels are accepted under the open cover, subject to payment of an additional premium.

CLAUSE:  A section or paragraph in an insurance policy that explains, defines or clarifies the conditions of coverage.

COBRA (Consolidated Omnibus Budget Reconciliation  Act):  A federal law under which group health plans sponsored by employers with 20 or more employees must offer continuation of coverage to employees who leave their jobs, voluntarily or otherwise, and their dependents; gives individuals and their dependent families the right to continue their health care coverage for as long as 18 months.

COINSURANCE:  (1) In property insurance, a clause under which the insured shares in losses to the extent that he is underinsured at the time of loss. (2) In health insurance, a provision that the insured and insurance company will shared covered losses in agreed proportion. In health insurance, the preferred term is "percentage participation."

COLLISION COVERAGE:  Physical damage protection for the insured's own automobile(s) for damage resulting from a collision with another object or upset.

COMMERCIAL GENERAL LIABILITY (CGL) COVERAGE PART:  General liability coverage which may be written as a monoline policy or part of a commercial package. "CGL" now means commercial general liability forms which have replaced the earlier "comprehensive" general liability forms. The latest forms include all sublines, provide very broad coverage, and two variations are available, "Occurrence," and "Claims Made," coverage.

COMPREHENSIVE COVERAGE:  Traditional name for physical damage coverage for losses by fire, theft, vandalism, falling objects and various other perils. On Personal Auto Policies this is now called "other than collision" coverage. On commercial forms, it continues to be called "comprehensive coverage."

COMPREHENSIVE GENERAL LIABILITY POLICY:  A policy covering a variety of general liability exposures, including Premises and Operations (OL&T or M&C), Completed Operations, Products Liability, and Owners and Contractors Protective. Contractual Liability and Broad Form coverages could be added. In most jurisdictions the "Comprehensive General Liability Policy" has been replaced by the newer "Commercial General Liability (CGL) forms which include all the standard and optional coverages of the earlier forms.

COMPREHENSIVE PERSONAL LIABILITY POLICY (CPL):  A personal liability contract. It provides personal liability coverage for the individual and family needs arising out of numerous personal activities and situations, such as the ownership of residential property, ownership of pets, sports activities, and many other everyday activities.

CONDITIONALLY RENEWABLE:  A contract of health insurance that provides that the insured may renew the contract to a stated date or an advanced age, subject to the right of the insurance company to decline renewal only under conditions defined in the contract.

CONSEQUENTIAL LOSS:  A loss arising indirectly from an insured peril.

CONSTRUCTIVE TOTAL LOSS:  A partial loss of sufficient degree to make the cost of repairing as much or more than the property is worth or is insured for.

CONTRACT CARRIER:  A transportation company which carries the goods of only certain customers and not the public in general as in the case of a common carrier.

CONTRACTUAL LIABILITY:  Liability assumed under any contract or agreement. Coverage is generally limited in liability policies, but in most cases may be provided for an additional premium.

CONTRIBUTION:   The term relates to circumstances where more than one party covers the risk. Each party is deemed to be liable for his proportion of the loss. If the Assured recovers in full from one insurer, that insurer is entitled to recover from the other insurer for that part of the loss which should have been paid by the latter. The term is used in marine insurance, also, in relation to contributions paid by the Assured in connection with salvage and/or general average.

CONTRIBUTORY VALUE:   The value on which a contribution to a general average loss or salvage award is calculated.

CONVERSION PRIVILEGE:  A right granted to group certificate holders, by which they may obtain an individual policy (upon leaving the group) regardless of physical condition.

CO-PAYMENT:  The portion, either a percentage or a fixed dollar amount, of a medical bill that a patient pays. The insurer pays the rest.

COUNTRY DAMAGE:  Marine term referring to damage to baled or bagged goods (e.g. cotton) caused by excessive moisture from damp ground or exposure to weather, or by grit, dust or sand forced into the insured property by windstorm or inclement weather.

COVER:  (1) A contract of insurance; (2) To effect insurance; (3) To include within the coverage of a contract of insurance.

COVERAGE:  The scope of protection provided under the contract of insurance.

COVERAGE PART:  Any one of the individual commercial coverage parts that may be attached to a commercial policy.

COVERAGE TRIGGER:  A mechanism that determines whether a policy covers a particular claim for loss. For example, the difference between the coverage triggers of liability "occurrence" forms and "claims made" forms is that the loss must occur during the policy period in the first case and the claim must be made during the policy period in the second case.