Insurance Terms and Related Concepts

Unoccupancy

• A property that is currently occupied and furnished.

• A property that is not currently occupied but is still furnished and ready for use.

• A property that is under renovation and not available for use.

• A property that is completely empty and unfurnished.

Specific Insurance

• Coverage for a specific item or location.

• General coverage for all items.

• Coverage for items in transit only.

• Insurance that covers only natural disasters.

Vicarious Liability

• Liability assigned to one party for the actions of another.

• A legal principle that allows a party to be held liable for the actions of another under certain circumstances.

• A type of insurance that covers damages caused by employees.

• A contract that limits the liability of one party in a transaction.

Physical Hazard

• A condition that increases the chance of loss.

• A type of insurance policy.

• A legal requirement for safety.

• A method of risk assessment.

Law of Large Numbers

• A principle that states that as the number of exposure units increases, the actual results will more closely approximate the expected results.

• A theory that suggests that random events will always produce a predictable outcome.

• A law that indicates that larger samples will always yield more accurate results than smaller samples.

• A concept that explains the relationship between risk and return in investments.

Endorsements

• Amendments or additions to an insurance policy that change its terms or scope of coverage.

• A type of insurance policy that covers only specific risks.

• A legal document that cancels an existing insurance policy.

• A summary of the terms and conditions of an insurance policy.

Negligence

• Failure to take proper care in doing something, leading to damage or injury to another.

• A legal term for a type of contract dispute.

• The act of intentionally causing harm to another person.

• A method of resolving disputes outside of court.

Insurable Interest

• A stake in the value of an entity or event for which an insurance policy is purchased to mitigate risk of loss.

• A legal requirement for all insurance policies to be valid.

• A type of insurance that covers only personal property.

• An investment strategy to increase wealth through insurance policies.

Pure Risk

• A risk that presents the chance of loss but no opportunity for gain.

• A risk that offers both the chance of loss and the opportunity for gain.

• A risk that has no chance of loss or gain.

• A risk that guarantees a profit regardless of the outcome.

Coinsurance/Insurance to Value

• A requirement for the insured to carry insurance equal to a specified percentage of the value of the property to receive full compensation for a loss.

• A type of insurance that covers only partial losses.

• A provision that allows the insured to choose the amount of coverage they want.

• A policy that provides coverage for natural disasters only.