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Course 2 Vocab > Specialty Coverages > Flashcards

Flashcards in Specialty Coverages Deck (32):
1

Umbrella liability policy

A liability policy that provides excess coverage above underlying poli- cies and may also provide coverage not available in the underlying policies, subject to a self-insured retention.

2

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.

3

Professional liability insurance

Insurance that covers persons engaged in various occupations against liability resulting from their rendering or failing to render professional services.

4

Management liability insurance

Insurance that covers organizations and in some cases their direc- tors, 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.

5

Retroactive date

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.

6

Extended reporting period (ERP)

An additional period (also called a “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.

7

Directors and officers (D&O) liability insurance

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.

8

Entity coverage

Coverage extension of D&O liability policies for claims made directly against a corporation (the “entity”) for wrongful acts covered by the policy.

9

Employment practices liability (EPL) insurance

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 termina- tion, and unlawful discrimination.

10

Fiduciary liability insurance

Insurance that covers the fiduciaries of an employee benefit plan against liability claims alleging breach of their fiduciary duties involv- ing discretionary judgment.

11

Employee benefits liability insurance

Insurance that covers an employer against liability claims alleging improper advice or other errors or omissions committed while admin- istering the employer’s employee benefit plans.

12

Site-specific environmental impairment liability (EIL) policy

An insurance policy that covers third-party claims arising from either sudden or gradual releases of pollutants from specified locations.

13

Underground storage tank (UST) compliance policy

An insurance policy that provides proof of financial responsibility under governmental regulations that apply to the owners and opera- tors of underground storage tanks containing fuels or other hazardous materials.

14

Remediation stop-loss policy (cost cap policy)

An insurance policy purchased to insure remediation costs that exceed the projected or anticipated costs of performing an environ- mental cleanup of a specific location that is being sold.

15

Contractors pollution liability (CPL) policy

An insurance policy that covers the pollution-related loss exposures of a contractor.

16

Aircraft insurance

Insurance that covers liability due to the insured’s ownership, mainte- nance, or use of aircraft; physical damage to aircraft owned or used by the insured; and other aircraft loss exposures.

17

Intangible property

Property that has no physical form.

18

Denial-of-service attack

An attempt to overwhelm a computer system or network with exces- sive communications in order to deny users access.

19

Malware

Malicious software, such as a virus, that is transmitted from one computer to another to exploit system vulnerabilities in the targeted computer.

20

Excess liability policy

A policy that covers liability claims in excess of the limits of an underlying policy or a stated retention amount.

21

Infringement

The unauthorized use of an individual’s intellectual property.

22

Principal

The party to a surety bond whose obligation or performance the
surety guarantees.

23

Obligee

The party to a surety bond that receives the surety’s guarantee that
the principal will fulfill an obligation or perform as promised.

24

Suretyship

The obligation of one entity to answer for the debt, default, or miscarriage
of performance of duties by another entity.

25

Contract bond

A surety bond guaranteeing the fulfillment of obligations under construction
contracts or other types of contracts.

26

Surety

The party (usually an insurer) to a surety bond that guarantees to
the obligee that the principal will fulfill an obligation or perform as
required by the underlying contract, permit, or law.

27

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.

28

Performance bond

A contract bond guaranteeing that a contractor’s work will be completed
according to plans and specifications.

29

Payment bond

A contract bond guaranteeing that the project will be free of liens.

30

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.

31

Public official bond

A commercial surety bond guaranteeing that a public official will
perform his or her duties faithfully and honestly.

32

Court bonds

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.