Familiarize yourself with common professional liability insurance terms so you can quickly locate the exact protection you need. Carefully browse the glossary so you know which cover to select. Use CTRL+F (CMD+F on Mac) to find the term you looking for.
As opposed to a fixed interest rate, this is any insurance rate that can change over time. An adjustable rate often moves based upon an exterior indicator, such as rate of prime interest.
Harm or financial loss incurred by a consumer based upon a company’s false advertising.
Agent: Also referred to as a ‘broker,’ this is a trained, licensed professional working within the insurance business.
Carrying the definition of ‘total’ or ‘sum,’ this word often precedes terms such as indemnity, risk, or limit.
Also referred to as an ‘agent,’ this individual is a trained, licensed professional working within the insurance business.
Money or other resources used in a manner that is meant to generate income. Can also refer to a company’s net worth.
In insurance dealings, this is the section of a contract containing simple information such as home address, phone number, and so forth.
The amount the insured agrees to pay at the time of a covered incident before insurance payments will begin.
Considered to have a particular country or location as one’s permanent home.
This is a way of determining premium payments based on the number of claims or aggregate dollar sum of claims made by the insured in the previous year.
A term that indicates criminal activity, fraud is an intentionally deceptive act that obstructs or perverts the truth of a given situation.
The state of being unable to perform a given duty or task up to established standards of quality.
The losses occurring in a predetermined period of time.
A provision included in some contracts wherein one party agrees to indemnify or ‘hold harmless’ the other party in terms of certain losses, damages, and claims.
Consent given after a party has been provided full relevant information.
A type of damage incurred by a claimant. Harm resultant of another party’s product or actions.
Refers to a lapse in coverage, possibly the result of neglect to immediately renew a policy.
The legally binding obligation to settle a debt. This can pertain to an individual or a business.
The perceived risk a company or individual stands of being held liable for certain losses or damages.
Top-most amount to be paid out by an insurance company to an insured member under a qualifying circumstance.
Amount spent or debt incurred in the course of defending oneself or company against a claimant. Can also refer to a type of damage a claimant names when pursuing action against an individual or company
Alternately known as risk control or risk management, this is any effort taken by the insured to minimize risk of or extent of loss.
The number one arrives to having divided losses by paid premiums.
A category of professional liability insurance specifically for medical professionals.
Sometimes synonymous with ‘omission,’ this refers to the failure to act in some needed way.
Net Earned Premium
In accordance with an agency’s liability for unearned premiums, this is the yearly net premium adjustment.
Net Written Premium
The premium as it stands after commission and ceded reinsurance have been subtracted out.
Policy under which an insurance company is precluded for assessing those insured for any extra amount to make up for company shortfalls.
Can refer to a level of assessed risk higher than the average.
Period of time between inception date of policy and a specified retroactive date in claims-made liability polices wherein the retroactive date comes prior to inception date.
Policy covering claims arising in a given period of time, irrespective of when the claims were reported.
The specific amount of loss already paid by an insurance company.
A qualifying circumstance which could reasonably lead to loss. Retroactively, the scenario that led to the loss.
Usually bodily injury, direct harm incurred by one party due to the actions or product or another party.
One’s individually owned possessions. Personal property can be one’s home, car, furniture, etc.
The specific insurance agreement worked out between an insurance company and the insured individual or company.
The recurring payment that keeps one’s insurance policy active.
Compensation above and beyond that required to take care of real damages. When one is ruled to pay an excessive amount by the courts, it is deemed a punishment.
An event designated in the terms of one’s insurance policy.
Refers to the practice by multiple insurers to share insurance policies, thereby reducing risk to individual companies.
Means of establishing premium rates based upon current year’s (as opposed to past year’s) experience.
Categories of risk as designated by terms of an insurance policy.
Another term for ‘loss control,’ risk management refers to efforts by the insured party minimize any an all risks.
Excluding a breach of contract, tort is term for a civil wrong.
The process of insuring, or providing insurance to, another individual or company.
Designated responsibility of one party for the acts of another.