Insurance Definitions

Back to Insurance Definitions

L

LEASE:   Contract whereby the owner or user of property (the lessor) agrees to let another party, (the lessee) use the property for a consideration (money or rent).

LEASEHOLD INSURANCE:   Insurance for the tenant of a property leased against the loss of value of the lease or of profit from a sub-lease through termination of the lease by fire or other peril insured against.

LESSEE (Leasee):  The party to whom a lease is granted.

LESSOR:  The party who grants a lease to the lessee.

LIABILITY:   Broadly, any legally enforceable obligation; a responsibility of one person to another, enforceable in law.

LIABILITY INSURANCE:   That insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.

LIABILITY LIMITS:   The sum or sums beyond which a liability insurance company does not protect the insured on a liability policy.

LIEN:  A word that indicates an encumbrance on property, either for discharge of a duty or the payment of a debt. When a lien exists, the conditions attaching to the issue of an insurance contract require that it be disclosed to the insurance company.

LIFE INSURANCE:  Protection against the death of the Insured in the form of payment to a designated beneficiary, typically a family member or business.

LONG-TERM CARE INSURANCE:  A type of insurance policy that covers the cost of long-term custodial care in a nursing facility or at home.

LOCATION CLAUSE:   Used in cargo open covers this limits Underwriters' liability in any one location.

LOSS OF USE INSURANCE:  Insurance against loss due to the inability to use property because of its damage or destruction.

LOSS OF HIRE INSURANCE:  A type of marine insurance designed to pay for continuing expenses and loss of profits to vessel owners while unable to work after a claim. It provides the means to pay loans, insurance premiums, key clerical staff, captain and essential crew, and other expenses. (Similar to "Business Interruption" or "Loss of Income" policies.)

LOSS PAYABLE CLAUSE:  Clause in an insurance policy to specifically identify interested parties (the insured, mortgagees, trustees, lienholders, etc.).