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Damages - The amount required to pay for a loss.
Date of Issue - The date stated in a policy as the date on which the contract was issued by the insurer. This is not necessarily the effective date of the policy.
Debris Removal Clause - A provision that may be included in a Property policy contract to provide the insured with indemnification for expenditures incurred in the removal of debris produced by the occurrence of an insured peril. Ordinarily a Property policy covers only the direct damage caused by an insured peril.
Declaration - A term used in insurance to denote that portion of the contract which states the name and address of the insured, the property insured, its location and description, the policy period, the amount of insurance coverage, applicable premiums, and supplemental representations by the insured.
Declination - Rejection of an application for insurance by the insurer.
Deductible - The portion of an insured loss to be borne by the insured before he is entitled to recovery from the insurer.
Defamation - Any derogatory statement which is designed to injure a person's business or reputation. Defamation can be accomplished as libel or slander.
Defendant - The person being sued in a court action.
Degree of Care - A duty owed to others which depends on circumstances. Persons who invite others on their premises, those who invite children on their premises and those who sell what might be considered inherently dangerous products are all required to take different degrees of care to prevent harm to others.
Demolition Clause - A provision that excludes liability for costs incurred in demolishing undamaged property, often necessitated by building ordinances requiring that structures must be demolished after a certain degree of damage has been sustained.
Demolition Insurance - Insurance written to cover the cost of demolition excluded by a demolition clause. It may be endorsed to Property Insurance for an additional premium.
Deposition - A sworn statement of a witness or other party in a judicial proceeding.
Deposit Premium- The premium paid at the inception of a contract which provides for future premium adjustments. It is based on an estimate of what the final premium will be; also know as provisional premium.
Depreciation - A decrease in the value of any type of tangible property over a period of time resulting from use, wear and tear, or obsolescence.
Development Factor- A factor designed to correct errors in estimating the reserves for known but unsettled losses and to make an allowance for incurred but not reported (IBNR) losses.
Difference in Conditions (DIC) - A separate contract that expands or supplements insurance on property written on a named perils basis so as to cover on an all-risk basis, subject to certain exclusions.
Direct Loss (or Damage) - A loss which is a direct consequence of a particular peril. Fire damage to a refrigerator would be a direct loss. Spoiling of food in the refrigerator as a result of the fire damage would be an indirect loss.
Directors and Officers Liability Insurance - Insurance that protects directors and officers from liability claims arising out of alleged errors in judgment, breaches of duty, and wrongful acts related to their organizational activities.
Disability - A condition that curtails to some degree a person's ability to carry on his normal pursuits. A disability may be partial or total, and temporary or permanent.
Discount Ratio (D-Ratio)- Factor used in the experience rating plan to separate the expected losses into primary and excess losses. A D-Ratio is the normal ratio of primary expected losses to the total expected losses, and varies by state and by classification code.
Discovery Period - The period of time allowed an insured who has canceled a bond to discover and report to the previous surety a loss that occurred during the term of that bond. Losses so reported are paid by the original surety even thought another surety is on the risk at the time of the discovery. The usual discovery period is 1 year.
Double Indemnity - Payment of twice the basic benefit in the event of loss resulting from specified causes or under specified circumstances. For example, a Life Insurance contract may provide for twice the basic benefit if death is due to accident. Accident policies may provide double indemnity coverage for death due to an elevator accident.
Drive-In Claim Service - A facility maintained by an Automobile insurer in which the extent of damage to a claimant's automobile can be determined and, in many cases, a settlement made.
Drive-Other-Car Endorsement (DOC) - A coverage that may be added to an Automobile policy affording auto coverage to the individuals named in the endorsement while they are driving cars not owned by the individuals and not named in the policy.
Dun and Bradstreet, Inc. (D&B) - A corporation which furnishes insurance companies with financial reports which assist them in the underwriting of prospective policyholders.
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EBIT- Earnings before interest and taxes.
Earned Premium - The amount of the premium that has been "used up" during the term of a policy. For example, if a 1-year policy has been in effect 6 months, half of the total premium has been earned.
Earth Movement -A peril including landslide, mud flow, earth sinking, rising or shifting, and earthquake. Usually excluded on homeowners' and commercial property policies.
Economic Value- Future income assigned to the property.
Effective Date - The date on which the protection of an insurance policy or bond goes into effect.
Electronic Data Processing (EDP) - Specialized type of insurance designed to cover computer equipment, data systems, information storage media and expenses or income loss related to EDP losses.
Embezzlement - Fraudulent use of money or property which has been entrusted to one's care.
Employee Dishonesty - Any dishonest act of an employee which may contribute to a loss for the employer. Fidelity bonds are usually used to protect against such losses.
Employee Retirement Income Security Act (ERISA) - This act prescribes federal standards for funding, participation, vesting, termination, disclosure, fiduciary responsibility, and tax treatment of private pension plans.
Employers Liability Coverage - (Workers' Compensation) This is the coverage B of the standard Workers' Compensation policy. It provides coverage against the common law liability of an employer for injuries to employees as distinguished from the liability imposed by a Workers Compensation law. Employers Liability applies in situations where a worker does not come under these laws.
Employment Practices Liability Insurance (EPLI) - covers claims arising from wrongful acts in the workplace. The most frequent types of employment practices liability claims include wrongful termination, discrimination, and sexual harassment.
Endorsement - A written or printed form attached to the policy which alters provisions of the contract.
Errors and Omissions Insurance - (1) A form of insurance that indemnifies the insured for any loss sustained because of an error or oversight on his part. For instance, an insurance agency purchases this type of coverage to protect itself against losses from such things as filing to issue a policy. (2) A form of insurance which covers losses resulting from financial institutions failing to effect insurance coverage.
Estimated Premium- The amount of premium charged at the time a policy is issued. This amount may be subject to adjustment during the policy term in case of changes in coverage or additional underwriting information.
Excess Insurance - coverage designed to be in excess over one or more primary coverages, and which does not pay a loss until the loss amount exceeds a certain sum.
Excess Loss Premium- This expression is used in connection with retrospective rating plans for worker's compensation. It is a premium which compensates the insurer for the fact that the insured has elected to limit the effects of any one large loss under the retrospective rating formula. For example, the insured might elect a loss limitation of $50,000, which would mean that would be the maximum amount of any one loss that would go into the retrospective calculation.
Excess Premium- A premium that is not a part of a loss sensitive rating formula. For example, in a retrospective rating plan, the non-subject or excess premium usually purchases the excess insurance (over the loss limits, not to be confused with insurance in excess of primary or SIR). The expression "non-subject" refers to the fact that the premium is a guaranteed cost and not adjustable based on losses. Excess premium is not subject to the retro formula.
Exclusion - A contractual provision that denies coverage for certain perils, persons, property, or locations.
Expected Losses-Loss projections ("Loss pics") based on probability distributions and statistics; frequently developed using actuarial techniques.
Expected Loss Rate (ELR)- In computing workers compensation experience modification, the factor taken from actuarial tables used to calculate "total expected losses" for the specific classification.
Expediting Expenses - Expenses incurred in order to speed up repair or replacement so as to reduce the amount of loss by a peril covered in a policy. Most commonly used in connection with Business Interruption and Boiler and Machinery Insurance. Expediting expenses are generally covered if they reduce the amount of the loss that the insurer would otherwise have to pay.
Expense Reserve - A liability for incurred but unpaid expenses.
Expenses - The cost of conducting an insurance operation aside from the amount paid for losses.
Expense Constant- An expense factor (usually a dollar amount) added to the premium charged for a class of policies, which would otherwise produce insufficient premium to cover the cost of issuing and servicing them.
Expense Ratio- A formula used by insurance companies to relate income to administrative expenses.
Experience - (1) The loss record. It can be that of an insured, an agent, a territory, a type of insurance written, or any other category. (2) A statistical compilation relating losses to premiums.
Experience Modification - The increase or decrease in premiums resulting from the application of an experience rating plan, usually expressed as a percentage.
Experience Rating - A method of adjusting the premium for a risk based on past loss experience for that risk compared to loss experience for an average risk.
Expiration - The date indicated in an insurance contract as its termination date.
Exposure- Situation, practice or condition that might lead to a loss; an activity or resource (asset, people)
Extended Reporting Period (ERP) - A period allowing for making claims after expiration of a "claims-made" liability policy. Also known as "tail".
Extra Expense - A form that provides reimbursement to the insured for the extra expenses reasonably incurred to continue the operation of a business when the described property has been damaged by a peril covered by the contract. This insurance is normally used by businesses where continuity of operation, regardless of cost, is a necessity as, for example, any business that would permanently lose customers if there were any suspension of operations.