A person (or entity or insurer), who is legally responsible for the contracts, debt, delinquency, or liability of another.
A bond meant to guarantee that a bidder of a contract enters that bid in good faith and will properly execute the contract if the bid is successful. A bid bond will compensate the principal in the event the successful bidder fails to execute the contract.
A bond given to guarantee payment, usually of a contractor to sub-contractors and suppliers. This is frequently the only protection offered those supplying work or materials to a public job.
A bond guaranteeing performance of the terms of a contract. This protects the owner of the contract from financial loss should the contractor refuse or be unable to fulfill the contract’s obligations.
A bond which insures that an entity will restore to its original condition, land that it has mined or altered.
A bond given to guarantee repayment or offset of funding usually provided to sub-contractors and suppliers. This is frequently the only protection offered to this funding.
General Insurance Terms
The price of insurance protection for a specified risk for a specified period of time.
Tax the Insured pays on top of the Premium to the Insurance Company, which the Insurance Company transfers to its Tax Authority. This Insurance Premium Tax exists only in several countries, and is different in different countries.
A levy the Insured pays on top of the Premium to the Insurance Company, which the Insurance Company transfers to the local Authorities. Insurance Levy exists only in several countries, and is different in different countries.
A fee the insurance company charges the Insured on top of the Premium.
A fee charged by the Insurance Company where special considerations and expenses are made to conclude a quote or secure cover or secure capacity to an applicant.
Also referred to as “Policy Jacket”: The written contract effecting insurance, or the certificate thereof, by whatever name called, and including all clauses, terms and conditions. The Policy Wording is usually a general document, not issued individually for an insured, but is written to address a line of insurance.
Also referred to as “Certificate of Insurance”: The written document where all the specific details of the insured and the risk covered are detailed, and all special terms, specific terms and conditions are detailed.
In effect, insurance that an insurance company buys for its own protection. The risk of loss is spread so a disproportionately large loss under a single policy doesn't fall on one company. Reinsurance enables an insurance company to expand its capacity; stabilize its underwriting results; finance its expanding volume; secure catastrophe protection against shock losses; withdraw from a line of business or a geographical area within a specified time period.
Generally refers to Lloyd's of London, England, an institution within which individual underwriters accept or reject the risks offered to them. The Lloyd's Corp. provides the support facility for their activities.
Liability Insurance Terms
Insurance covering an insured's liability to third parties for causing bodily injury (BI) or property damage (PD).
A type of liability coverage designed to protect traditional professionals (e.g., accountants, attorneys) and quasi-professionals (e.g., real estate brokers, consultants) against liability incurred as a result of errors and omissions in performing their professional services. Although there are a few exceptions (e.g., physicians, architects, and engineers), most professional liability policies only cover economic or financial losses suffered by third parties, as opposed to bodily injury (BI) and property damage (PD) claims. The vast majority of professional liability policies are written with claims-made coverage triggers.
A professional error, omission, or act of negligence in performing a professional act. Also, a term used to denote the type of professional liability insurance coverage written to cover physicians, surgeons, accountants, lawyers, architects, and engineers, among others.
This policy provides coverage to the insured (employer) for liability to employees for work-related bodily injury or disease. In most countries, the standard Employers Liability policy is a standard required policy form.
An insurance policy that provides coverage for an employer's two key exposures arising out of injuries sustained by employees. Part One of the policy covers the employer's statutory liabilities under workers compensation laws, and Part Two of the policy covers liability arising out of employees' work-related injuries that do not fall under the workers compensation statute. In most countries, the standard workers compensation policy is a standard required policy form.
Protection against financial loss arising out of the legal liability incurred by an insured because of injury or damage resulting from the use of a covered product or out of the liability incurred by a contractor after a job is completed (completed operations cover).
An insurance form that protects the insured against liability for committing an error or omission in performance of professional duties. Generally, such policies are designed to cover financial losses rather than liability for bodily injury (BI) and property damage (PD).