CAS 2: Assignment 13
NBCR Exclusion Endorsement
TRIA does not mandate coverage for losses from terrorist attacks that use nuclear, biological, chemical, or radiological materials (NBCR acts of terrorism) when such coverage is not provided in the base policy. Therefore, ISO has developed endorsements for excluding losses caused directly or indirectly by NBCR acts. These endorsements may be offered, at the insurer's option, only when the insured initially rejects certified acts of terrorism coverage.
excess liability policy
a policy that covers liability claims in excess of the limits on an underlying policy or a stated retention amount. may be a "following form" subject to the same terms as the underlying policy, a self-contained policy subject to its own terms only, a combination of the two.
drop down coverage
provided by many umbrella liability policies for (1) claims that are not covered by an underlying policy because the underlying policy's aggregate limits have been depleted and (2) claims for which the underlying policies do not provide any coverage, regardless of aggregate limits. When a claim covered by the umbrella policy is not covered at all by any primary policy, the WHAT is usually subject to a self-insured retention (SIR) (an amount that is deducted from claims that are payable under an umbrella liability policy and that are not covered at all by any primary policy)
principal
the party to a surety bond whose obligation or performance the surety guarantees
business interruption
Cyber insuring agreement: provides coverage for loss of business income, loss of contingent business income, and payment of extra expenses incurred as a consequence of a business interruption or suspension of the insured's computer system (or dependent system) due to a computer network security breach or other specified cyber events.
cyber risk
The high-tech risk posed to organizations that conduct their operations electronically and/or digitally, it includes property, net income, and liability loss exposures. Insurers typically offer policies containing first-party-only coverage (property and theft), third-party-only coverage (liability), or both in a combination policy format. Because first-party cyber risk losses can be difficult to assess and quantify, policies that offer first-party coverages have not been as widely available as those that include third-party coverages. Some insurers offer combination property and liability policies. Combination policies in particular allow insurers and organizations to match coverage with loss exposures.
payment bond
a contract bond guaranteeing that the project will be free of liens. also known as a labor and materials payment bond, is usually included in the contractor's performance bond but could be issued in a separate bond. It offers payment protection vital to private project owners because labor and material suppliers who go uncompensated can usually apply a mechanic's lien to the property. When a lien is placed on property, the owner does not have clear title to the property until all debts are settled.
maintenance bond
a contract bond guaranteeing that the work will be free from defects in materials and workmanship for a specified period after the project is completed. Some performance bonds automatically include this coverage without an additional charge for one year
umbrella liability policy
a liability policy that provides excess coverage above underlying policies and may also provide coverage not available in the underlying policies, subject to a self-insured retention. It almost always provide excess coverage over several primary policies (eg CGL auto liability and employers liability). It provides additional limits above the each occurrence limits of the insured's primary policies and takes the place of the primary insurance when primary aggregate limits are reduced or exhausted. It may also cover some claims that are not covered by the insured's primary policies. When they were first introduced, the distinguishing feature of these policies was broader coverage, in at least some respects, than that of the underlying policies. More recently, there has been a reduction in the scope of coverage so that most are not much broader than the primary policies and may even contain more restrictive exclusions than those found in the primary policies. contain drop down coverage, required underlying coverages, aggregate limits, insuring agreement, exclusions, and conditions
Nonowned aircraft liability coverage
is designed for firms that have employees or other agents who use airplanes in the firm's business. The coverage is available on a stand-alone basis for firms that have no other aircraft exposure. It is also purchased as part of an aircraft liability policy to provide coverage for substitute or rented aircraft.
court bond
A classification of surety bonds guaranteeing that a person or an organization will faithfully perform certain duties prescribed by law or by a court or will demonstrate financial responsibility for the benefit of another until the final outcome of a court's decision. they are often required by courts in connection with lawsuits. they are also required in connection with disputes over the ownership of personal property. they also include fiduciary bonds, which guarantee the performance of persons appointed by a court to administer the property or interests of others. Principals of fiduciary bonds can include court-appointed guardians of minors or others, executors or administrators of estates, and receivers or trustees in bankruptcy proceedings.
malware
malicious software, such as a virus, that is transmitted from one computer to another to exploit system vulnerabilities in the targeted computer
aircraft hull coverage
"hull" is widely used to refer to physical damage coverage for aircraft. The two most common aircraft hull coverages are "all risks—ground and flight" and "all risks—not in motion." All risks—ground and flight, the broader of the two, covers the insured plane whether it is in flight or on the ground at the time of the loss. All risks—not in motion covers the insured plane only when it is on the ground and not moving under its own power. Thus, coverage applies while the plane is being towed, because it is not moving under its own power. Coverage does not apply, however, while the plane is taxiing, because the plane is moving under its own power. The exclusion of claims caused by war, strikes, riots, and similar perils noted in connection with aircraft liability also applies to aircraft hull coverage. Most of the remaining exclusions applicable to aircraft hull coverage are comparable to auto physical damage exclusions, such as losses due to wear and tear, mechanical breakdown, and tire damage. Some aircraft policies exclude losses on any aircraft whose FAA Airworthiness Certificate has become void or has been restricted. insurance on smaller aircraft is usually subject to a dollar deductible, either for a flat amount (such as $1,000) or for a stated percentage (such as 10 percent) of the plane's value. Some policies are written with a specified dollar deductible for ground coverage and a percentage deductible when the aircraft is in flight. Larger multi-engine aircraft are sometimes insured with no deductible because deductibles do not eliminate many claims; the cost to repair even minor damage to such planes can amount to thousands of dollars.
bid bond
A contract bond guaranteeing that a contractor bidding on a construction or supply contract will enter into the contract and will provide a performance bond if the bid is accepted. The obligee is usually the owner of a proposed construction project, although in some cases it may be a general contractor. If the principal (the bidder) fails to fulfill this obligation, the surety will pay the obligee the difference between the amount of the principal's bid and the bid finally accepted, plus any additional expenses incurred because of the contractor's default.
contract bond
A surety bond guaranteeing the fulfillment of obligations under construction contracts or other types of contracts. the surety's willingness to furnish the bond is evidence that, in the surety's judgment, the principal is qualified to fulfill the terms of the contract and The surety guarantees that, even if the principal defaults, the obligations of the contract will be performed, or the surety will indemnify the obligee. these are frequently required by law, therefore obligees are often government entities. these can be in the form of bid bonds, performance bonds, payment bonds, and maintenance bonds. they also used to secure a variety of contracts other than construction contracts, such as those that deal with mechanical equipment rental with or without operators, transportation of school children, snow and garbage removal, or street cleaning.
aggregate limits
Almost all umbrella policies contain aWHAT that operate like those in the primary insurance. In some cases, the WHAT applies to all claims under the umbrella; in other cases, it applies only to coverages that are subject to an aggregate in the underlying policies.
exclusions
Although the WHAT contained in umbrella policies resemble those found in underlying policies, some variation usually exists. When an umbrella policy provides broadened coverage, it is typically achieved by using WHAT in the umbrella policy that have narrower application than the WHAT in the underlying policies. Another possibility is that the umbrella policy contains an WHAT that does not exist in any of the underlying policies and may provide narrower coverage than the underlying insurance for the particular exposure.
license and permit bond
Cities, states, and other political subdivisions often require persons or organizations wanting to engage in a particular business or trade, such as auto dealers, liquor stores, or building contractors, to obtain a license. Similarly, a person or an organization wanting to exercise a particular privilege in connection with its business may be required to obtain a permit. Examples of activities that may require permits include food handling and use and disposal of chemicals that may cause pollution. Some bonds guarantee compliance with laws that apply to the licensed activity; some additionally guarantee the payment of damages to anyone who suffers a loss resulting from noncompliance with those laws. other such bonds apply to specific activities
Cyber crime
Cyber insuring agreement: covers theft of money and securities and, depending on the insurer's form, intangible property. losses typically result from computer attacks or computer fraud
intellectual property liability
Cyber insuring agreement: provides an insured with coverage for any copyright, trade secrets, trademark, or patent infringement claims arising out of the use of the insured's protected ideas or works (or infringing on the protected ideas or works of another).
cyber extortion
Cyber insuring agreement: provides coverage for expenses related to computer network kidnap and/or ransom events.
notification or remediation
Cyber insuring agreement: provides coverage for expenses related to crisis management during and after a cyber risk loss (typically related to a security breach). Coverage can include crisis management-related expenses such as costs to notify customers of a security breach and costs to develop and execute a public relations campaign to manage any negative publicity surrounding the breach and to maintain the insured's reputation.
technology errors and omissions liability
Cyber insuring agreement: provides coverage for liability arising from any negligent act, error, or omission relating to an insured's products or services provided to others.
network security liability
Cyber insuring agreement: provides coverage for liability arising from security breaches to an insured's computer network. Examples of sources of losses include a situation in which a cyber criminal attempts to gain access to the insured's network for personal financial gain, a random malware transmission, and a denial-of-service attack. Resulting liability losses can include, for example, damage to customers' data, customers' loss of use of services, and misappropriation of funds from customer accounts.
electronic media liability
Cyber insuring agreement: provides coverage for liability arising from the insured's electronic content. Depending on the insuring agreement, the coverage can include email communications; website content; and message board or discussion forum content that results in actual or alleged acts of defamation, disparagement, libel, slander, or false advertising. It also can be categorized as errors and omissions in the written or spoken word resulting in claims alleging financial loss or damage
privacy liability
Cyber insuring agreement: provides coverage for liability arising from unauthorized disclosure or use of the private information of others or, depending on the insuring agreement, liability arising out of an insured's failure to comply with privacy provisions contained in laws such as the Health Insurance Portability and Accountability Act (HIPAA), the Gramm-Leach-Bliley Act (GLBA), or any anti-identity theft legislation. Actions typically are generated by a network security breach or unauthorized access to or use of information
electronic data protection
Cyber insuring agreement: typically provides coverage for costs to recover or restore electronic data that has been altered, destroyed, deleted, or damaged.
required underlying coverages
Each insurer writing umbrella liability policies has its own requirements for the types and amounts of WHAT that the insured must have.
other acts exclusion endorsement
ISO also makes endorsements available for excluding acts of terrorism other than TRIA-certified acts of terrorism. These endorsements allow insurers to exclude noncertified acts of terrorism occurring outside the United States (including its territories and possessions and Puerto Rico). These endorsements are available only for use with commercial liability coverages, because those coverages insure some exposures outside the jurisdictional boundaries of TRIA. These endorsements exclude other acts of terrorism committed outside the U.S. only when one or more of these situations exist: The total of all damages (including business interruption) to all types of property from terrorism exceeds $25 million (in U.S. dollars); Fifty or more people sustain serious physical injury or death; The act of terrorism involves the use, release, or escape of nuclear materials or results in nuclear reaction, radiation, or radioactive contamination; The act of terrorism is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; Pathogenic or poisonous biological or chemical materials are released when one purpose of the terrorist act appears to be the release of such materials.
limitations endorsement
If a policyholder initially declines certified acts of terrorism coverage, the insurer may offer more limited terrorism coverage amounts in return for a reduced premium. An insurer may accomplish this by writing the coverage for a sublimit that is lower than the limit applicable to other exposures. Such a sublimit could apply to a subsequent certified act of terrorism that occurs within an annual policy period if the limits are not exhausted by the prior act of terrorism. ISO has developed limitations endorsements for certified acts of terrorism that include a schedule of sublimits that apply to each coverage form, coverage part, or policy to which the endorsement is attached.
management liability insurance
Insurance that covers organizations and in some cases their directors, officers, and other employees against liability claims for damages resulting from various wrongful acts that are not covered under other commercial liability policies; common examples are directors and officers liability insurance, employment practices liability insurance, employee benefits liability insurance, and fiduciary liability insurance. it is less about individuals in occupations rendering or failing to render professional services and more about the wrongful acts of an organization or of individuals in their roles managing the operations of an organization.
punitive damages exclusion endorsement
Insurers providing liability coverage for certified acts of terrorism may wish to exclude payment for terrorism-related punitive damages that result from civil actions. ISO has developedthese for liability coverages when state laws permit such exclusions. These endorsements exclude coverage for punitive damages awarded against a policyholder that arise directly or indirectly out of certified acts of terrorism as defined by TRIA.
insuring agreement
Many umbrella liability policies contain one comprehensive WHAT instead of several specific ones. A common approach is for the insurer to promise to pay the amount in excess of the underlying limit that the insured becomes legally obligated to pay as damages for bodily injury, property damage, personal injury, or advertising injury arising out of an occurrence to which the policy applies, subject to the umbrella policy's limit. Other umbrella policies use two WHAT, often referred to as "A" and "B." In effect, these policies combine an excess policy and an umbrella policy in one policy. WHAT A is an excess coverage applying over the underlying policies. WHAT B applies to occurrences for which coverage is available under the umbrella but not in the underlying policies.
claims made trigger
Professional and Management Liability Contrasted With CGL: Although Insurance Services Office, Inc. (ISO), maintains a claims-made CGL form, it is seldom used. Most businesses are insured under the occurrence version of the CGL. In contrast, most professional liability policies and management liability policies have a WHAT instead of an occurrence trigger. The reason for using a claims-made policy is that professional and management liability claims are sometimes not settled until long after the policy has expired. With a claims-made policy, the policy in effect when the claim is first made against the insured is the policy that covers the claim. In contrast, a liability policy with an occurrence trigger can cover a claim that is made many years after the policy has expired, as long as the injury occurred during the policy period. Insurers prefer to cover claims under current policies rather than under policies that expired many years previously. Key features of claims-made policies include retroactive dates (the date on or after which the injury, damage, or other insured event must occur in order to be covered in a claims-made liability policy, shown in declarations. if it doesn't exist, policies will cover claims first made during the policy period, regardless of when the injury, damage, or other insured event occurred) and extended reporting periods (an additional period/"tail" following the expiration of a claims-made policy, during which the expired policy will cover claims first made for injury or damage that occurred on or after the policy's retroactive date, if any, and before policy expiration) Some claims-made professional and management liability policies have a built-in ERP that applies automatically, for no additional premium. Typically, this basic ERP only lasts for thirty to sixty days. Some claims-made policies allow the insured to request a longer ERP in exchange for an additional premium. Typically, these supplemental ERPs last for one to three years. Some insurers provide longer ERPs.
deductibles
Professional and Management Liability Contrasted With CGL: Most small to mid-size organizations have CGL coverage with no deductible. In contrast, professional liability and management liability policies are usually subject to a deductible. Most insurers have mandatory minimum deductibles for their various classes of professional liability and management liability policies.
duty to defend and selection of defense counsel
Professional and Management Liability Contrasted With CGL: Professional liability and management liability policies can provide defense coverage in the same manner as the CGL policy, in which the insurer has the duty to defend the insured against claims that fall within the scope of the policy's coverage. The insurer selects and pays the attorneys that defend the insured. In contrast, some professional liability policies provide defense cost reimbursement coverage requiring that the insurer reimburse the insured for defense expenses covered by the policy. Under such policies, the insured usually has the right to select counsel, sometimes subject to the insurer's approval. Some professional liability and management liability policies give the insured the option to assume the defense even though the policy otherwise provides that the insurer shall have the duty to defend. A further difference is that the cost of defense under professional liability and management liability policies is often paid within (not in addition to) the limit of insurance. Under standard CGL policies, defense costs are paid in addition to the policy limits, until the policy limits are depleted by settlements or court awards.
consent to settle
Professional and Management Liability Contrasted With CGL: The CGL policy provides that the insurer may, at its discretion, settle any claim or suit. The insured is seldom involved in that decision and has no policy-given right to prevent a settlement that the insurer wants to make. In contrast, because professional or business reputations may be at stake in claims under professional liability and management liability policies, the insured frequently is given the right to participate in the decision to settle a claim in such policies. The policy may provide that the insurer cannot settle a claim without the insured's consent. If the insured does not consent to settlement, the insurer, at its expense, must then (unless the policy provides otherwise) continue to defend the insured and pay any judgment that the court awards. More typically, professional liability and management liability policies provide that if the insured does not agree to a proposed settlement, the insured must take over the defense and pay any further defense expenses as well as the amount of any judgment or settlement that exceeds the amount for which the insurer could have settled the claim. This provision is sometimes informally referred to as a "hammer clause," because it usually compels the insured to agree to the settlement proposed by the insurer.
auto coverage endorsement
TRIA does not apply to auto insurance, regardless of whether coverage is provided in a primary auto liability coverage form (such as the Business Auto Coverage Form) or included along with other liability coverages in a commercial umbrella or excess liability policy. (ISO has made terrorism exclusions available for use with primary commercial auto coverage forms, although these exclusions are not specifically related to TRIA.) With respect to the ISO Commercial Liability Umbrella Coverage Part or Commercial Excess Liability Coverage Part, ISO has developed terrorism-related endorsements that address auto liability coverage. The basic purpose of these endorsements is to either cover or exclude acts of terrorism with respect to auto liability exposures, regardless of whether coverage for terrorism is provided or excluded for exposures other than auto.
cap endorsement
TRIA places a $100 billion program cap on annual aggregate insured losses paid by the federal government and all insurers for certified acts of terrorism. When a policyholder accepts certified acts of terrorism coverage, the ISO Commercial Lines Manual requires the insurer to attach a cap endorsement developed for the specific line of business and coverage provided. This endorsement clearly describes certified acts of terrorism as defined in TRIA (as do most of the other terrorism endorsements) and informs the policyholder that the insurer's responsibility to pay losses for certified acts of terrorism will end if the program cap is reached. Additionally, the endorsement states that if the cap is exceeded, the Secretary of the Treasury will mandate calculation of pro rata shares of insured losses below the cap, which could reduce the policyholder's coverage. The program cap does not apply to any acts of terrorism that are not certified acts of terrorism.
does not
The CGL coverage form WHAT include a professional liability exclusion, so many professional liability exposures would be covered unless an exclusion endorsement is attached to the policy. Because professional liability requires different underwriting, rating, and claim handling skills, most insurers do not want to provide it as part of CGL coverage. Accordingly, for several professional classifications, insurers routinely attach a professional liability exclusion that eliminates coverage for bodily injury, property damage, or personal and advertising injury resulting from the rendering or failure to render any professional services listed in the endorsement. it differs from professional liability and management liability policies by the claims-made trigger, consent to settle, duty to defend and selection of defense counsel, and deductibles
conditions
The maintenance of underlying insurance WHAT obligates the insured to maintain all required underlying coverages in full force and effect during the policy period. The insured further agrees to notify the insurer promptly if any underlying policy is changed or replaced by a policy issued by another insurer. If the underlying insurance is not maintained, the umbrella policy will apply as though the underlying insurance had been maintained. That is, a claim that would have been covered by an underlying policy, had it been kept in force, will only be covered for the amount that exceeds the limit of the underlying policy. The umbrella policy will not drop down to pay claims that would have been covered by the required underlying policy. Most umbrella policies provide worldwide coverage, in contrast with the more limited coverage territories ordinarily found in primary policies. However, some umbrella policies require that suit be brought in the U.S. or Canada for coverage to apply.
Terrorism Risk Insurance Act
Under the WHAT (TRIA), the federal government shares the financial responsibility for terrorism losses with the insurance industry (through federal reinsurance). Insurers that write the lines of business subject to TRIA are required to make coverage available for certified acts of terrorism on the same terms and conditions as coverages that apply to nonterrorism events. ISO and NCCI have made endorsements to do so
insurance agents and brokers
WHAT E&O Liability Policies (professional liability policy): failure to properly advise a customer regarding his or her insurance needs, failure to obtain insurance for a customer in a timely manner after agreeing to do so, failure to renew a policy at expiration without giving prior notice to the customer, and failure to properly advise the customer regarding appropriate limits. Insurance producers can also become liable to the insurers they represent. agrees to "pay on behalf of the Insured damages that the Insured becomes legally obligated to pay because of claims made against the Insured for wrongful acts arising out of the performance of professional services for others."
environmental professional
WHAT E&O Liability Policies: ontain insuring agreements that resemble the coverage grants of traditional engineers professional liability policies and do not contain pollution exclusions. A wide range of vendors who face potential liability from professional errors, acts, or omissions purchase these policies, including environmental engineers, testing labs, tank testers, and environmental consultants. they are written on a claims-made basis, usually subject to a retroactive date and a substantial deductible. exclusions differ by insurer. The insured-versus-insured exclusion eliminates coverage for claims in which one insured sues another insured for damages arising out of a professional error, act, or omission. Most professional liability underwriters believe that such suits are a business risk that should be assumed by the affiliated entities and therefore should not be insured. The contractual liability exclusion addresses a similar business risk issue. Other exclusions in environmental professional E&O insurance include nuclear risks, warranties and guarantees, and fiduciary liability.
site specific
WHAT Environmental Impairment Liability Policies: an insurance policy that covers third-party claims arising from either sudden or gradual releases of pollutants from specified locations. they are commonly sold to factories, waste disposal sites, golf courses, farms, municipalities, warehouses, and oil refineries. Coverage enhancements allow policyholders to purchase protection against the costs of on-site cleanup, claims arising from releases from third-party disposal sites, and claims arising from preexisting pollution at insured sites. the insuring agreement obligates the insurer to pay on behalf of the insured a loss, in excess of any deductible, for bodily injury, property damage, cleanup costs, and defense expenses. The loss must result from pollution conditions that exist beyond the boundaries of the site(s) listed in the policy declarations. However, on-site cleanup is commonly added by endorsement to the policy. for the environmental coverage to apply, the bodily injury or property damage must result from pollutants emanating from an insured site. The second qualification is that physical injury or actual exposure to pollutants is required in some of the policy forms to trigger coverage for bodily injury claims. Most of the definitions include, as a minimum, expenses the insured incurs in the removal or remediation of soil, surface water, groundwater, or other contamination in response to a covered pollution liability loss. exclusions include known or preexisting conditions, deliberate noncompliance with environmental laws, punitive damages, sold or leased premises, nuclear liability, acid rain, war, contractual liability, damage to the insured site, products and completed operations, workers compensation and employers liability, transportation loss exposures, and terrorism. typically subject to a per-loss limit of liability, which is the most that the insurer will pay for bodily injury, property damage, cleanup costs, and defense expenses resulting from each release of pollutants. EIL policies also typically contain an aggregate limit of liability. The inclusion of defense expenses within EIL policy limits is an important difference from the CGL policy. on a claims-made basis
directors and officers
WHAT Liability Policies (management liability policies): Many organizations have a board of directors or trustees and a staff of officers. Directors are selected by the owners to make strategic decisions regarding the organization. Officers, generally selected by the board of directors, are drawn from the organization's top management. the individuals who serve as the directors and officers of a corporation can be sued, as individuals, for breach of their corporate duties. corporations usually agree to indemnify their directors and officers for the costs resulting from suits against them. The laws of several states permit or even require corporations to provide such indemnification to their directors and officers. Therefore, the directors and officers liability exposure affects both individual directors and officers and the corporation itself. Many corporations protect themselves and their directors and officers against this exposure by purchasing this. it is insurance that covers a corporation's directors and officers against liability for their wrongful acts covered by the policy and also covers the sums that the insured corporation is required or permitted by law to pay to the directors and officers as indemnification. Contains two insuring agreements: Coverage A (Covers the directors and officers of the insured corporation for their personal liability as directors or officers that results from a "wrongful act." Wrongful act is typically defined to include any breach of duty, neglect, error, misstatement, misleading statement, omission, or other act done or wrongfully attempted by the directors or officers) and Coverage B (Often referred to as company reimbursement coverage, it covers the sums that the insured corporation is required or permitted by law to pay to the directors and officers as indemnification for suits alleging wrongful acts by directors or officers). most now also include coverage C for entity coverage (coverage extension for claims made directly against a corporation for wrongful acts covered by the policy) entity coverage presents disadvantages for directors and officers because it requires them to share the limits of insurance with the corporation
employment practices
WHAT Liability Policies (management liability policies): insurance that covers an organization, its directors and officers, and its employees against claims alleging damages because of wrongful employment practices such as sexual harassment, wrongful termination, and unlawful discrimination. The growth of federal and state legislation dealing with employment discrimination and sexual harassment, the changing legal views on wrongful termination, and the increasing tendency of aggrieved parties to turn to the courts for settlement of such disputes have caused insurers to specifically exclude coverage for such employment-related claims from CGL policies. To fill this gap in coverage, insurers offer this. The definition of insured in an EPL policy usually includes the corporation; its directors and officers; its employees; and its former directors, officers, and employees. In some policies, coverage for employees applies only to managerial or supervisory employees.
physicians
WHAT Professional Liability Policies: Whose professional liability usually arises from improper performance in the practice of the profession that results in injury. can also be held liable for administrative errors or omissions connected with their medical practice. The insuring agreement in a typical WHAT professional liability policy covers damages for injury resulting from the rendering of or failing to render professional services by the insured or by anyone else for whose acts the insured is legally responsible (such as a nurse working under the insured's supervision). The insuring agreement also covers liability arising out of the insured's service on a formal accreditation board. The meaning of "injury" as used in such policies is very broad. Therefore, the damages that the insurer will pay on behalf of the insured are not restricted to those for bodily injury or property damage. Damages for emotional or mental injury, libel, slander, defamation, invasion of privacy, and similar offenses are generally covered by physicians professional liability policies unless specifically excluded.
remediation
WHAT Stop-Loss Policies: an insurance policy purchased to insure remediation costs that exceed the projected or anticipated costs of performing an environmental cleanup of a specific location that is being sold. designed to facilitate real estate sales, also known as cost cap policies. typically agree to pay, on behalf of the named insured, the expenses (in excess of the deductible) that the insured incurs in completing an approved remedial action work plan at a specified location. A claim under the policy is defined as "written notice to the insured that the remediation costs incurred at the project have exceeded the costs contained within the scope of work." The description of the "scope of work," which is different in each policy, is usually expressed in an endorsement to the policy. typically contain relatively few exclusions because they are written on a first-party coverage basis. As with other types of environmental insurance, these policies are written as manuscript forms, without standard terms or conditions. Some of the exclusions commonly found in remediation stop-loss policies are willful noncompliance with environmental regulations, bodily injury, contractual liability, and war
underground storage tank
WHAT compliance policies: an insurance policy that provides proof of financial responsibility under governmental regulations that apply to the owners and operators of underground storage ranks containing fuels or other hazardous materials. The Resource Conservation and Recovery Act (RCRA) requires owners or operators of underground storage tanks to demonstrate proof of their ability to pay claims resulting from the release of fuels or hazardous materials from the tanks. have a site-specific EIL policy as their core coverage. Most UST compliance policies are worded to provide the full financial responsibility compliance required by federal regulations. Additional policy provisions include a separate limit for defense costs, usually equal to 25 percent of the policy limit. The UST compliance policy also adds a sixty-day notice of nonrenewal and an automatic extended reporting period provision. These two provisions assure regulators that UST compliance policies comply with the minimum proof of financial responsibility requirements of RCRA or the applicable state regulations. RCRA further requires the owners or operators of underground storage tanks to provide evidence of financial responsibility for specified limits. For most tank owners, the required limit of insurance is $1 million per claim. Larger retailers of petroleum products may be required to provide evidence of $2 million of financial responsibility per claim.
fiduciary
WHAT liability policies (management liability policies): The Employee Retirement Income Security Act (ERISA) is the most comprehensive statute regarding employee benefits. Among other things, ERISA imposes specific duties on all employee benefit plan "fiduciaries." ERISA defines a fiduciary as practically anyone whose role in employee benefits involves discretionary control or judgment in the design, administration, funding, or management of a benefit plan. Those who meet the ERISA definition of a fiduciary can be held personally liable for the full amount of any loss resulting from a breach of their statutory duties. Moreover, the employer of the fiduciary can be held liable for the loss. Because of the broad interpretation of fiduciaries under ERISA, the principal and key employees of a firm are usually exposed to liability as fiduciaries. Fiduciaries can be sued if they breach fiduciary duties involving discretionary judgment. Even when the duty to select investments has been delegated to others, such as in a mutual fund or brokerage firm, the fiduciaries may be responsible for the errors or negligence of the investment managers. Fiduciary liability policies also usually include coverage for administrative errors in the same manner as the employee benefits liability insurance typically added by endorsement to a corporation's CGL policy. it is insurance that covers the fiduciaries of an employee benefit plan against liability claims alleging breach of their fiduciary duties involving discretionary judgment
contractors pollution
WHAT liability policies: an insurance policy that covers the pollution-related loss exposures of a contractor. Because CPL policies are modeled after site-specific EIL policies, many of their policy terms and conditions are similar. Both provide coverage for bodily injury, property damage, cleanup costs, and defense costs. However, many of the features of the site-specific EIL policy had to be modified to address contractors' insurance needs. The site-specific EIL policy is written on a designated premises basis, whereas the CPL policy is designed to cover a contractor's operations and activities at project sites and to cover the contractor's completed operations and contractual liability exposures. Unlike site-specific EIL policies, CPL policies provide coverage for loss arising from the described operations of the named insured. The insured operations are described in the application for insurance. Because the application becomes part of the insurance policy, failure to accurately describe the insured operations on the application or in the policy may result in deficient coverage. CPL policies are available with either a claims-made or an occurrence coverage trigger. A CPL policy may contain most of the exclusions of site-specific EIL policies. However, a CPL policy ordinarily omits certain exclusions of site-specific EIL policies so that the CPL policy will cover completed operations, damage to the insured site, and the cost of remediating the job site for a loss created by the contractor's operations. In addition, they exclude asbestos abatement operations, radioactive matter, claims arising out of the insured's products, damage to sites owner by or leased to the insured, and professional liability
disclosure endorsement
When insurers extend an offer to purchase insurance or to renew a policy, and at the time of purchase, TRIA requires them to inform policyholders about the costs and limitations of terrorism coverage through these three required disclosures: The portion of the policy premium that is attributed to certified acts of terrorism (insurers must list, in an endorsement or in the policy declarations, the coverages to which that premium applies), The federal share of compensation for certified acts of terrorism under the program (After the insurer's deductible is met, the federal share is 85 percent of losses attributed to certified acts up to the program cap), and the amount of the program cap ($100 billion, This disclosure must explain that if the program cap is exceeded, the amount of coverage for certified losses may be reduced at the discretion of the Secretary of the Treasury). For the ISO lines of business, policyholders can decline certified acts of terrorism coverage, in which case other options may be offered by endorsement at the insurer's discretion.
workers compensation endorsement
Workers compensation insurance is subject to TRIA. Therefore, insurers must include coverage for certified acts of terrorism in any workers compensation policies they write. Moreover, state workers compensation statutes prohibit insurers from excluding or limiting coverage for acts of terrorism (whether certified or not). Therefore, few terrorism-related endorsements are needed for workers compensation policies. NCCI has developed endorsements to help insurers comply with the TRIA disclosure requirements and to inform policyholders about premiums related to acts of terrorism. The Terrorism Risk Insurance Program Reauthorization Act Endorsement defines certified acts of terrorism and discloses the portion of workers compensation premium that is attributed to certified acts, the federal share of compensation for certified acts under the program, and the amount of the program cap ($100 billion). In contrast to the ISO disclosure endorsements, this workers compensation endorsement states that an insured loss means any loss resulting from an act of terrorism, including an act of war, for purposes of workers compensation. This endorsement also describes the insurer's deductible under the program (20 percent of direct premium earned during the prior year).
public official bond
a commercial surety bond guaranteeing that a public official will perform his or her duties faithfully and honestly. Certain types of public officials are required by law to have bonds that protect the public against the officials' failure to perform their duties faithfully and honestly. officials required to are those whose duties involve the handling of public funds, the seizure and disposition of property, the arrest or detention of persons, or any other duties that could result in violation of the rights of others. Among the public officials required to be bonded are treasurers, tax collectors, sheriffs and deputies, police officers, judges and court clerks, notaries public, insurance commissioners, and bank examiners.
performance bond
a contract bond guaranteeing that a contractor's work will be completed according to plans and specifications. The surety typically has several options if the principal has defaulted, including completing the contract using either the existing contractor or a replacement, having the obligee arrange for completion of the work and reimbursing the obligee for the additional costs, or paying damages. The surety has the right to seek reimbursement from the principal for any payments.
passenger voluntary settlement coverage
also known as admitted liability coverage, is unique to aircraft insurance and is normally available for industrial aid aircraft. The coverage provides scheduled benefits if a passenger suffers death, dismemberment, or loss of sight. For benefits to become payable, the insured must ask the insurer to pay and the claimant must release the insured from liability for all bodily injury caused by the accident.
denial of service attack
an attempt to overwhelm a computer system or network with excessive communications in order to deny users access
aggregate limit endorsement
available for use with certain commercial liability coverage forms. These endorsements limit the insurer's exposure and provide limited liability coverage for certified acts for a reduced premium. The insurer may offer the aggregate limit endorsements only when the insured initially rejects certified acts of terrorism coverage.When used with commercial general liability and farm liability coverage forms, it applies to bodily injury, property damage, personal and advertising injury, and medical payments arising out of certified acts of terrorism. When used with the Products/Completed Operations Liability Coverage Form, the limit applies to bodily injury and property damage only. When applicable to a particular policy, this is subject to the policy's general aggregate and products/completed operations aggregate limit. Other policy limits, such as the each occurrence limit, continue to apply (to damages arising out of a certified act of terrorism) if and to the extent that the this specified in the endorsement is not exhausted.
certified acts exclusion endorsement
exclude coverage for certified acts of terrorism when the insured has declined the insurer's offer of TRIA coverage. These endorsements may be attached for each line of business and coverage to which TRIA applies. Acts of terrorism that are not certified under the federal program are not excluded by this endorsement; however, coverage of such acts would be subject to other exclusions or limitations in the policy. Some states require that any policy insuring property loss caused by fire provide coverage that is at least equal to the coverage provided under a Standard Fire Policy (SFP). In these states, fire losses caused by terrorist action cannot be excluded. Certified acts exclusion endorsements contain an exception for these "SFP" states indicating that coverage is not excluded for direct loss or damage by fire to covered property when the fire results from a certified act of terrorism. The exception further states that these fire losses are limited by the program cap. This SFP exception and its related schedule are for property coverages and are not included in certified acts exclusion endorsements developed for liability (only) policies.
aircraft insurance
insurance that covers liability due to the insured's ownership, maintenance, or use of aircraft; physical damage to aircraft owned or used by the insured; and other aircraft loss exposures. purpose of use categories: airline, business and pleasure, industrial aid, commercial use, special use, instruction and rental, sales demonstration. there is no standard policy. A few insurers write aircraft insurance on their own, but most aircraft insurance is provided by a pool of insurers or by underwriters in the London market. its policies are divided into liability and physical damage sections. A fundamental difference between auto insurance and aircraft insurance, however, is that pilots of insured aircraft must meet strict qualifications: They must hold both the appropriate license and current medical certification from the Federal Aviation Administration (FAA) and are often required to have at least a specified number of hours of experience as the pilot-in-command of the type of aircraft insured. except for policies covering airlines, aircraft policies cover only the plane or planes specifically described in the policy. Aircraft insurance policies written for general aviation risks (all classes of aircraft shown in the exhibit other than airliners and military aircraft) usually have no counterpart to the "any auto" coverage provided by symbol 1 of the Business Auto Coverage Form. An aircraft policy can include aircraft liability coverage, aircraft hull (physical damage) coverage, and other aircraft coverages. Other aircraft coverages can include medical payments coverage, passenger voluntary settlement coverage, and nonowned aircraft liability coverage.
professional liability insurance
insurance that covers persons engaged in various occupations against liability resulting from their rendering or failing to render professional services. also known as malpractice or errors and omissions (E&O) liability. "Malpractice" is the term commonly used to describe liability associated with occupations that involve contact with the human body, ranging from beauticians to physicians. "Errors and omissions" is the term more likely to be used to describe professional liability for occupations such as accounting, insurance, law, and engineering.
insuring foreign operations
options include: Foreign property and business income insurance; Foreign liability insurance; Foreign supplemental and excess auto insurance; Foreign voluntary workers compensation and employers liability insurance; Foreign crime, including kidnap and ransom insurance; Political risk insurance to provide protection against seizure of assets, currency inconvertibility, and interference with contractual performance. These coverages are similar to their domestic counterparts, although some are unique to foreign situations. For example, foreign voluntary workers compensation policies often include coverage for transportation expense to return disabled or deceased employees to the U.S. (repatriation expense). Foreign voluntary workers compensation policies also can provide coverage for endemic diseases, which are diseases that are generally associated with a specific geographic region (such as malaria). There are no standard forms for these coverages. Each insurer in this specialized market develops its own wordings. a multinational enterprise can purchase admitted coverages and combine them with a difference in conditions (DIC) policy written to wrap around the admitted coverages, thereby maintaining uniform coverage for all the insured's locations. In some cases, a global insurance program is purchased centrally from an insurer that can provide admitted coverage worldwide, either through its own subsidiaries or insurers with which it has reciprocal arrangements.
aircraft liability coverage
protects the insured against third-party claims for bodily injury and property damage resulting from the ownership, maintenance, or use of insured aircraft. A combined single limit applies to all third-party claims, except in cases in which insurers impose a sublimit on claims by passengers. is usually not subject to an aggregate limit. Higher limits of liability may be available by increasing the primary liability limit; however, umbrella or excess liability coverage for aircraft is not always available. Private aircraft owners often have difficulty obtaining adequate liability limits. Exclusions are: Intentional injury, except to prevent interference with safe operations; liability assumed under contract. However, some policies cover liability assumed under incidental contracts, such as a contract for use of an airport; bodily injury to an employee of the insured; obligations under workers compensation or similar laws; claims caused by war, strikes, riots, labor disturbances, terrorism, sabotage, hijacking, or unlawful seizures; damage to property owned, leased, occupied, controlled, or under the care of the insured. However, some policies provide basic limits of coverage for passengers' baggage or for damage to hangars leased by the insured; claims by one employee against another, referred to as the fellow-employee exclusion. The policies used by some insurers do not contain this exclusion, and others will remove it by endorsement when requested by the insured and agreed to by the underwriter. Various provisions are included in, or can be added to, aircraft policies to cover the insured's potential liability arising out of aircraft not specifically described in the policy. Such provisions can cover newly acquired aircraft; temporary substitute aircraft; and other aircraft not owned, leased, or regularly used by the insured.
aircraft medical payments coverage
similar to the medical payments coverage available in auto policies. The coverage pays, regardless of the insured's legal liability, for reasonable medical or funeral expenses incurred by occupants of the insured aircraft.
suretyship
the obligation of one entity to answer for the debt, default, or miscarriage of performance of duties by another entity. may be designed to comply with various contractual arrangements that arise between a principal and an obligee, and with various legal and statutory requirements
obligee
the party to a surety bond that receives the surety's guarantee that the principal will fulfill an obligation or perform as promised
miscellaneous bond
those that do not fit under other surety bond categories. These bonds often support private relationships and unique business needs. Examples are: Lost securities bonds guarantee that an entity that issues replacements for lost securities will be indemnified for any financial loss that results from the duplication of the securities; Hazardous waste removal bonds guarantee federal or state governments that owners or operators of hazardous waste facilities will comply with laws for closure and post-closure care of the facilities; Credit enhancement financial guaranty bonds guarantee governmental entities that investors will be paid promised interest and that principal will be returned at maturity of debt instruments.
