Glossary

Accident*
An event that happens by chance and is not expected in the normal course of events, which results in harm to people, damage to property or equipment, or a loss of process or productivity.

Accident Benefits (AB)
Indemnity provided to an insured on a first-party basis towards the cost of medical and rehabilitative care for the treatment and recovery of injuries arising out of the use or operation of an insured’s automobile. Accident benefits may include provisions for the partial reimbursement of wage loss and home care expenses. Such benefits may also include funeral expenses and survivor’s benefits in the event of a loss that involves an insured’s fatality.

Actual Cash Value (ACV)
The fair market value of property, taking into account factors that might augment or reduce the value of the property in question. Actual cash value (ACV) is usually calculated in one of three ways: (1) cost to repair or replace less depreciation; (2) fair market value; or (3) consideration of all relevant evidence of the value of the damaged property.

Actuary*
A certified professional who specializes in mathematics of insurance and evaluates statistical information to determine rates and risks.

Additional Insured
A person other than the named insured who is protected by the terms of the policy. The additional insured may be named or unnamed.

Additional Living Expense Insurance
Coverage applicable under a homeowners, condominium, and renter’s policy that indemnifies the insured for the additional expenses incurred when an insured’s dwelling is damaged by an insured peril to such an extent that one cannot live in it until repaired. This insurance pays the extra amount it costs to live elsewhere until repairs are made, such as the cost of living in a hotel. It usually provides living expenses of 10 percent to 20 percent of the amount of the structural coverage on the home.

Additional Named Insured
Any party, other than the original named insured, identified as an insured in the policy declarations. An additional named insured has more rights under the policy than does an additional insured but also more responsibilities.

Adjuster
One who investigates insurance claims, makes recommendations regarding the payment of benefits from insurance policies, and negotiates payments and settlements.

Agent
A person licensed and authorized or employed to act on behalf of another.

Application
A request by an insured for insurance. Applications may be done verbally, in writing, or online. The insured provides information relating to the subject for insurance. The insurer then assesses this information and decides whether to accept the risk for insurance and on the terms of such acceptance.

Appraisal
An independent professional evaluation of the physical condition and/or market value of an item of property.

Arson*
The willful and malicious burning of property.

Automobile Insurance
Insurance coverage that provides indemnity and/or compensation for injury or physical damage which ensues from the ownership, use or operation of an automobile.

Avoidance of risk*
Taking steps to remove a hazard, engage in an alternative activity, or otherwise end a specific exposure.

Bad Faith
1) Design to deceive or mislead another. 2) Conscious wrongdoing. 3) Constructive fraud.

Basic insurance policy*
See Named Perils

Blanket Policy
An insurance policy that covers two or more items or locations in one aggregate sum insured without separate amounts for each item.

Bodily Injury
A term used in auto and liability policies meaning physical injury, including sickness, disease, mental injury, shock, or death.

Boiler and Machinery Insurance
Coverage against loss caused by equipment breakdown and malfunction, as well as sudden explosions arising from the ownership, use, and operation of boilers, pressure vessels, and machinery.

Branding*
A car is branded after an accident to indicate its state of disrepair as one of the following:

Salvage - A vehicle that has sustained damage to the point where the cost of fixing it exceeds its cash value prior to the damage.

Irreparable - A vehicle that is incapable of safe highway operation, has sustained damage beyond repair, including flood damage and is only used for parts.

Rebuilt - A vehicle that was severely damaged but has been repaired and inspected and met rigorous determined standards.

Stolen - A vehicle that has been stolen from its owner. Only the police can apply or remove this brand.

Breach
Failure to meet the conditions or warranties contained in a specific policy of insurance.

Broker
A licensed independent person or firm who acts on behalf of an insured in placing business with insurance companies.

Builders Risk Insurance
Insurance coverage on property under construction, including loss to buildings, machinery, and equipment under the course of construction, and materials and supplies incidental to the completion of the construction project.

Business Insurance
A broad name for different coverage available to a business owner to protect against losses and to insure the continuing operation of the business. Business insurance includes business property, life, accident, and sickness including that for key employee(s), liability, and fleet of automobile.

Business Interruption Insurance
Insurance against loss of profits and continuing fixed expenses resulting from a fire or other insured peril that prevents a business from continuing its normal operations.

By-law Endorsement
An endorsement explaining how a particular insurance company deals with a claim which is affected by a local by law.

Canadian Loss Experience Automobile Rating (CLEAR)*
This is a method for classifying different models of cars for insurance purposes by using historical claims data, including Collision, Comprehensive, Direct Compensation - Property Damage, and Accident Benefits coverages. CLEAR is used by many insurance companies across the country.

Canadian Standard for Automobile Theft Deterrent Systems (ULC S338)*
This is the benchmark for all immobilizer theft deterrent systems. In after-market systems, the Canadian Standard demands that the immobilizer cut three vital circuits in the vehicle - the starter, the ignition and the fuel supply - to disable the vehicle. In Original Equipment Manufacturers (OEM) systems, the immobilizer disables the fuel injection system to render the vehicle inoperable. The Canadian Standard also requires that each theft deterrent system undergo extensive laboratory testing. Immobilizers meeting ULC S338 offer a proactive means of preventing vehicle theft.

Capacity
The measure of an insurer’s ability to issue contracts of insurance. Measured usually by the largest amount it will accept on a given risk or, in certain situations, by the maximum volume of business that the company is prepared to accept.

Captive Insurance Company
An insurance company that provides insurance to, and is controlled by, its owners.

Certificate of Insurance
Written document stating that insurance is in effect. Includes general statement of policy's coverage.

Claim*
The exercising of a policyholder's right under a policy to be paid by his or her insurance company for certain financial losses suffered. A claim can be any notification of a possible loss under an insurance policy, whether or not any payment follows. For every claim that is reported, the insurance company must set aside money ("reserves") sufficient to cover its anticipated cost.

Claimant
One who makes a claim.

Claims Examiner
An employee of an insurance company who directs the investigations of staff adjusters and independent adjusters, reviews their reports, and approves claim settlements.

Claims-made Policy
Refers to an insurance policy that provides coverage when a claim is made against the policy, regardless of when the claim event took place. A claims-made policy is most likely to be purchased when there is a delay between when claims occur and when they are filed.

Clause
Words in a policy which describe certain specifications, limitations or modifications.

Co-insurance Clause
A distinct section or provision in an insurance policy that requires an insured (property owner) to carry separate insurance for a specified amount stated in the policy to be eligible for full coverage. If there is insufficient coverage, the insured must pay part of the loss.

Co-insurer
Two or more persons or companies who may be sharing a loss. A company whose policy covers the same risk as that of one or more other companies, is a co insurer whether the policies are written separately or together.

Collapse
Falling in of a building.

Collision
The act of striking against something with force. The impact of a moving body; for example, a vehicle, vessel, or rail with another or with a fixed object in or upon the ground.

Collision or upset Insurance
An item of coverage in an automobile physical damage policy that insures against loss or damage resulting from the act of striking against something with force or from tipping over.

Commercial Automobile
Any class of vehicle used to transport equipment, tools, goods, or people in relation to the insured's business as stated in the application for insurance, and any emergency services vehicle as qualified under the governing legislation where it is operating.

Commercial General Liability policy (CGL)*
A standard form of liability insurance developed for use in the business sector. It is usually contained in a broader mercantile policy also covering property loss and business interruption.

Commercial Host Liability (Liquor Liability)*
Coverage for the liability incurred by owners of establishments selling alcoholic beverages, for damage caused by intoxicated patrons and for injury to themselves or third parties.

Commercial Property Floater
(1) A property insurance form that covers commercial property items of a portable nature. (2) A property insurance form that covers property at specified premises of the insured, at newly acquired premises, and while in transit within Canada and the United States.

Commercial Property Policy
An all-risk and all-inclusive policy applicable to the stock of wholesalers, distributors, and retailers. Coverage is basically fire, extended coverage, theft and “all other perils.” Sometimes called a “commercial block” or “mercantile block” policy.

Commission
Compensation based upon the amount of production; for example, independent insurance agents are compensated on the basis of a percentage of the premium. The percentage varies with different lines of insurance.

Comprehensive Automobile Coverage
An item of coverage in an automobile physical damage policy insuring against loss or damage resulting from numerous miscellaneous causes such as fire, theft, windstorm, flood, or vandalism. Usually does not include loss by collision or upset.

Comprehensive General Liability Policy
A policy particularly suited to a manufacturer, contractor or large wholesaler or retailer providing broad coverage for claims made against him for bodily injury or damage to property of others for which he may become liable and which arise out of his entire business operation.

Conditions*
Conditions are terms of insurance contracts that impose obligations an insured person must satisfy in order to preserve coverage.

Condominium
Individual ownership of a single unit in a multi-unit building or group of buildings, including a percentage interest in the part of the total property owned jointly by all unit owners. Condominium property requires special insurance treatment.

Contract
An agreement or promise between two or more parties that is intended to be legally enforceable and is constituted by the acceptance by one party of an offer made by another party, to do or to abstain from doing a specific act. The offer and acceptance may either be expressed or be inferred through the conduct of the parties.

Coverage
What an insurance contract covers. Can be used interchangeably with “insurance” or “protection,” as in “fire coverage” or “fire protection” or “fire insurance.”

Crime Stoppers*
An international, non-profit civilian program that assists police in solving crimes through tips reported by citizens who have knowledge or a suspicion of a crime that has taken place. Since its establishment, Crime Stoppers has contributed to solving more than half a million criminal cases internationally, with a value of more than $3 billion.

Cyber Crime
A criminal offence committed through a computer or the Internet that causes loss or damage to the victim’s computer system, network, or data; denies access to data or service; or enables further related crimes such as extortion or the resale of stolen data.

Cyber Risk
Any risk of financial loss, disruption of business, or damage to an organization’s reputation due to a failure of its information technology systems.

Damages
The money claimed by, or ordered to be paid to, a person as compensation for another's fault or negligence.

Death Benefit
An amount set out in the policy representing the amount that will be paid in the event of death. Also referred to as "principal sum."

Debris Removal
A provision in an insurance policy most commonly found in fire insurance providing indemnification for the cost of removal of the debris after a fire.

Declarations
Statements included in a policy that are agreed to by the insured and form the basis of the contract of insurance.

Dec Pages*
The portion of the insurance contract that contains information such as the name and address of the insured, the property insured and its location and description, the policy period, the amount of insurance coverage, applicable premiums, and any other information provided by the insured.

Deductible
An agreed specified amount that the insured must pay on a claim before the insurance company will cover the rest of the claim. This amount is agreed upon by both the insurer and the insured. An insured’s obligation to pay a deductible is not based on whether the insured is at fault.

Depreciation
Reduction in value of property through use, ageing, deterioration and obsolescence.

Detached Private Structures
Structures or buildings separated from a dwelling by a clear space, on the premises but not insured as a dwelling building. Normally if these structures are connected to a building by a fence, utility line or similar connection, they are considered to be detached; for example, a detached garage.

Direct Billing
A system for collecting premiums whereby an insurer bills and collects the premium directly from the insured as opposed to the agent or broker being a middleperson. Premiums are usually collected monthly by direct debit from the insured’s bank account.

Direct Compensation - Property Damage (DCPD) (Ontario, Quebec, PEI, New Brunswick, Newfoundland and Labrador, Nova Scotia, Alberta)*
Covers damage to - or loss of use of - an automobile or its contents, to the extent that the driver of another vehicle was at fault for the accident. It is called "direct compensation" because, even though someone else caused the damage, the insured person collects directly from his or her insurer instead of from the person who caused the accident.

Direct Loss
Damage to property by direct action of a peril insured against, as distinguished from contingent or indirect damage.

Direct Writer
Insurance company selling direct to the public and not through independent agents or brokers.

Directors' and Officers Liability' Insurance (D&O)
Protection for officers and directors of a corporation against damages resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors. These policies always require the insured to retain part of the risk uninsured. Also called D&O liability insurance.

Disappearing Deductible
A dollar amount deducted from the amount of loss that is reduced as the loss increases and then disappears entirely to provide full coverage when the loss reaches a certain specified figure. Disappearing deductible plans are principally associated with fire policies.

Disclaimer
A denial of liability for cause, e.g., to deny coverage under a policy on grounds that a statutory condition has been breached.

Disclosure
The process of revealing all relevant facts.

Driver Abstract
A three-year record of a driver. Includes information such as driver’s name, licence number, class, expiry date, conditions/restrictions, and/or status information.

Driver Training Credit
A premium discount or rebate given under private passenger automobile insurance for all new drivers who have successfully completed an approved driver training program.

Dwelling
A shelter intended or used as a space in which people live.

Earth Movement
A general term that includes earthquake, landslide, snowslide, and volcanic eruption, among other phenomena.

Earthquake Insurance*
Coverage for damage caused by an earthquake as defined in the contract.

Effective Date
The date of inception of an insurance policy, or the date additional coverages become effective.

Embezzlement
Fraudulent taking of personal property by someone to whom it was entrusted. Most often associated with the misappropriation of money. Can occur regardless of whether the defendant keeps the personal property or transfers it to a third party.

Employer's Liability Insurance
Coverage for the legal liability imposed on an employer to pay damages to an employee injured by the employer’s negligence. This is not workers’ compensation insurance, where special acts of legislation set out specifically the relationship between the employer and employees in certain circumstances and the formula by which awards in each case are computed.

Employment Practices Liability (EPL) Insurance
Insurance that provides protection for an employer against claims made by employees, former employees, or potential employees. It covers discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations. It covers the firm, including its directors and officers.

Endorsement
An amendment added to a written document, particularly an agreement between parties, altering its provisions.

Equipment
Material for use on one machine, one vehicle, one unit. For example, a car comes equipped with five tires. Tires other than those on the car are not considered to be the “equipment” of the car; they are instead the dealer’s “stock of tires.” Equipment also includes contractor’s equipment; for example, backhoe, bulldozer.

Équité Association
Industry association aimed at reducing and preventing insurance fraud.

Errors and Omissions (E&O) Insurance
An insurance form that protects the insured against liability for committing an error or omission in the performance of professional duties. Generally, such policies are designed to cover financial losses rather than liability for bodily injury or property damage.

Excess Insurance
Insurance which does not participate until all other similar insurance on the same subject is exhausted, or until the loss exceeds a previously agreed upon amount. Where there are two policies on a risk and both contain a provision that they are "excess to all other insurance," the problem is resolved by the general "guiding principles." This is usually interpreted so that each insurer contributes pro rata to the loss.

Exclusion
Risks, perils or properties defined in the policy as not covered.

Expense Ratio
(1) Expenses (including accruals), excluding loss adjustment expenses, during a defined period, divided by the premiums earned for the same period. (2) Percentage of the premium used to pay the costs of acquiring, writing, and managing a bond or policy.

Expiration Notice
Notice sent by the company to the broker/agent or one sent by the broker/agent to the client that a policy is due to expire.

Explosion
A rupture of a pressure vessel of some kind due to excessive internal pressure (usually accompanied by a loud noise).

Exposure
The hazard threatening a risk because of external or internal physical conditions.

Facility Association
An entity established by the Canadian automobile insurance industry to ensure that automobile insurance is available to all owners and licensed drivers of motor vehicles where such owners or drivers are unable to obtain automobile insurance through the voluntary insurance market.

Fault Determination Rules*
In Ontario, Quebec, New Brunswick, Nova Scotia, PEI, Newfoundland and Labrador and Alberta – charts or regulations are used to determine fault or responsibility for Direct Compensation - Property Damage claims, but not for injury claims in cases of vehicle collisions. The circumstances of a collision may show that more than one driver is liable for damage. Each driver's insurance company may then become involved in the settlement based on the degree of responsibility attributed to each person. If there is a dispute about responsibility, court action may be required to resolve it.

Fire Insurance
Coverage for losses from fire, lightning, and limited explosion and also the resultant damage caused by smoke and water. Usually supplemented by extended coverage insurance.

First Party*
The person who is insured on the insurance policy. He or she is also the "policyholder" or "insured." There may be other people, named or unnamed, who are covered as well.

Fleet Policy
In automobile insurance, a policy insuring a number of cars for one owner.

Floater*
Additional coverage for movable items, like jewellery or antiques, beyond what's included in the basic homeowner policy. Also called a "rider" or "endorsement".

Flood Insurance
Insurance against damage done by rising or overflowing of bodies of water.

Forgery*
(1) Materially altering or erasing an existing document with an underlying intent to defraud. (2) A counterfeit signature.

Fraud
1) Methods used to deceive to cause unwarranted favourable decision for one's own benefit. 2) Deliberate misrepresentation or misstatement. 3) Concealment of facts which should at the time be made known.

Friendly Fire
A fire that has been intentionally ignited and remains controlled and confined to its intended size and space, such as a fire in a fireplace or a furnace flame.

Garage Liability Insurance
Protection for an automobile dealer, repairer, service station, etc. The coverage is for legal liability for claims for bodily injury and property damage due to business operation.

General Damages
Damages awarded by a court of law for the pain and suffering of an individual; applied in a third-party injury claim.

General Insurance Ombudservice (GIO)*
Assists in the resolution of conflicts between insurance companies and their customers. When disputes arise, GIO's mediators and experienced customer service officers help insurance companies and customers work toward a solution that is in the best interest of both parties in a fair, independent and impartial environment. For more information about GIO and its services, please visit their website at www.giocanada.org

Good Faith
Most ordinary contracts are good faith contracts. Insurance contracts are agreements made in the utmost good faith. This implies a standard of honesty greater than that usually required in most ordinary commercial contracts.

Grace period*
A period after the premium due date during which an overdue premium may be paid without penalty. The policy remains in force throughout this period.

Guaranteed replacement cost
An undertaking by the insurer to pay the cost of repairs to or replace the dwelling building even if it is more than the amount of insurance on the dwelling building, provided certain conditions are met in addition to those that normally govern settlement at replacement cost. Called enhanced replacement cost in Quebec.

Hazard
1) A risk or probability that the event insured against might occur. 2) Condition which engenders or increases the chances of a loss.

Hired Automobile
An automobile hired or leased from others with or without drivers that is used under the control of the insured and in the business stated in item 3 of the application for the non-owned automobile policy.

Homeowners Policy
A multi-peril insurance policy for dwelling risks, combining coverages for fire and extended coverages, including theft and liability.

Impairment
The loss of physical or mental function as a result of an injury or illness. Impairment can be temporary or permanent.

Immobilizer*
An electronic anti-theft device that arms a vehicle automatically when it is switched off, and prevents unauthorized starting of the vehicle. (See also Canadian Standard for Automobile Theft Deterrent Systems)

Improvements and Betterments
Permanent additions or changes made to a building by a lessee, or condominium owner, at their own expense that may not legally be removed.

Indemnify
To provide compensation for loss or expenses incurred.

Indemnity
To provide compensation for loss or expenses incurred.

Inland Marine Insurance
Coverage for movable property in transit, excluding ocean crossing; includes bridges and tunnels, because they are implements of transportation.

Inspection Report
A detailed description of premises or property to be insured, including the hazards involved, prepared after a physical inspection of the risk.

Institute for Catastrophic Loss Reduction (ICLR)*
The insurance industry established the Institute for Catastrophic Loss Reduction (ICLR) in 1998. It is a coordinated effort of the Canadian home, car and business insurance community, the University of Western Ontario and other partners to reduce – through research and education – the loss of life and property caused by severe weather and earthquakes. ICLR is working to improve Canadians’ capacity to adapt to, anticipate, withstand and recover from natural disasters.

Insurance
A contract in which one party, the insurer, for monetary consideration agrees to reimburse another, the insured, for loss or liability for a loss on a defined subject caused by specified hazards or perils.

Insurance Claims Catastrophe
A sudden and unexpected event causing many insured claims, often on a large scale. The event often creates an urgent situation of need for policyholders that is a challenge to service due to the scarcity of resources in the aftermath.

Insurance Policy
A written contract of insurance that provides evidence that a contract exists. It states in detail the terms of the contract; that is, the terms of the agreement between insurer and insured.

Insured
Any person (including a corporation) covered by an insurance policy. In some policies, the term may be defined exhaustively to limit the coverage or defined broadly to expand coverage.

Insurer
The insurance company that undertakes to indemnify for losses and perform other insurance-related operations.

Joint and Several Liability
A legal term suggesting a partnership in which parties are bound to pay off all obligations regardless of the ability of some of the parties to pay all (or any) of the amount that would otherwise be apportioned to them.

Legal Liability
Liability imposed by law on individuals or corporations to pay for harm done to others. Such law may be the common law, statute law or customs which over a period of time have taken on the same status as law. Legal liability may also be assumed under the terms of a contract.

Liability Insurance
Insurance that agrees to indemnify the insured for sums they may be required by law to pay to third parties as damages for bodily injury or damage to property. The maximum amount of insurance provided under a policy of liability insurance.

Libel
Written statements, published in print or electronically with a permanent record, that damage a person’s reputation or business.

Lien
A charge upon real or personal property as security for some debt or duty. Also, the security interest created by a mortgage. The conditions of an insurance policy require the disclosure to the insurer of any existing lien on the insured property.

Like Kind and Quality (LKQ)
Refers to replacement of damaged, destroyed or lost property with used property of similar type and condition.

Limit of Liability
The maximum amount, as stated in the policy, that an insurer is bound to pay in case of a loss.

Limitation Period
The time prescribed by law within which a party has the opportunity to bring a legal action.

Loss
A word often used in place of the word "claim." It refers to the amount an insurer must pay because one of the possibilities of loss insured against under a policy, has happened.

Loss ratio
The loss ratio is the ratio of total losses paid out in claims plus adjustment expenses divided by the total earned premiums. Usually expressed as a percentage.

Malpractice
Performance by a professional that is deficient in skill from what might ordinarily be expected of a professional person. The standard of performance to which a professional person will be held is necessarily higher than the standard that an unskilled person would be expected to display.

Malpractice Insurance
Coverage for liability for acts of professional practitioners.

Managing General Agent (MGA)
An independent business operation given authority by a number of insurance companies to solicit business on behalf of such companies. Responsibilities include recruiting, training, and supervising agents.

Marine Insurance
A form of insurance that covers loss or damage to ships, cargo, and terminals, as well as any goods or cargo in transit, and the liability arising out of the use, ownership, or operation of any of the foregoing. Includes two general classes of risks: ocean marine and inland marine.

Material Fact
A fact that would affect a contract of insurance enough to influence an insurer’s decision regarding whether to accept or reject the risk or the premium to be set. Material facts must be disclosed by the applicant if asked about.

Misrepresentation
Incorrect or missing information about a material fact that is offered, or not, by an applicant or insured with or without the intent to mislead.

Moral Hazard
A position taken by an insured that increases the chance of a loss or the seriousness of a loss.

Mortgage Clause
A clause in an insurance policy that stipulates the rights and obligations of the insurer and the mortgagee.

Mutual Insurance Company
An insurance company that is owned and operated by its policyholders, who assume the risks of profit and loss and establish a corporation for the purposes of insuring one another against the possibility of fortuitous loss. Each policyholder pays a premium for their own insurance policy. If at the end of the fiscal year the mutual insurance company declares a profit, the profit is shared among all the policyholders. If the company declares a loss, there is also provision for the policyholders to be assessed a levy to make up for this shortfall.

Named Insured
The person or party designated in the policy as the insured, who has certain rights under the policy, as opposed to someone who may be covered by the policy but is not specifically named and does not have the same rights as the named insured.

Named Perils (or Basic) Insurance Policy
A policy in which the perils insured against are listed, as opposed to one that insures against “all risks.”

Negligence
Failure to use the degree of care expected from a reasonable and prudent person.

No-Fault
Simply, it means paying certain claims without reference to who was at fault. Used to describe a system for improving the compensatory process for automobile accident victims by eliminating costly and lengthy litigation. An automobile insurance system where accident victims are compensated by their insurer regardless of fault.

Non-disclosure
A contract of insurance is based on utmost good faith. An applicant for insurance is required to disclose to the company all material facts that are necessary to underwrite a policy. If the applicant does not disclose all these facts, the applicant is guilty of non-disclosure and may risk having coverage voided from inception.

Non-economic Loss
Payment for loss or harm that is not assessable in money. Where personal injury occurs, compensation may be payable for non-economic loss in the form of pain and suffering during serious illness, and also physical defects, disfigurement, or other permanent after-effects. Also called non-pecuniary loss.

Nonfeasance
The omission to perform duties which by law one is bound to do. The failure to perform an act required by law.

Non owned Automobile Policy (Non-owner's Policy)
A policy that protects the insured against third-party claims arising out of some other person using their own vehicle in the business of the insured.

Notice of Loss
Notification received by the insurance company from the insured that a loss has occurred. Failure to give such notice has been held to be a bar against recovery.

Nuisance
In law, this refers to a class of wrong that arises out of unreasonable, unwarranted or unlawful use by a person of his own property, whether that property be real or personal or from his own improper, indecent or unlawful personal conduct and producing an annoyance, inconvenience, discomfort or hurt to others or to their property that the law would presume a consequential damage. In insurance claims, it is most frequently met as a cause of action, arising from the escape of some obnoxious substance.

Occupancy
The act of holding possession of a property or premises. The term implies the use of the building for the purposes described in the policy, and no other. An occupied building has furnishings and/or people in it.

Occupant
One who has a right because of possession in or control over certain property or premises; one who acquires title by occupancy; a person who lives in or is the established user of a place such as a home or office or automobile; includes the driver who is in or on a vehicle or getting into, on, out of, or off of a vehicle.

Occupier
The person who has immediate supervision or control of the premises and the power to admit or deny entry to others.

Occurrence
(1) A happening or event. (2) The continual or repeated exposure to an unfavourable situation neither intended nor expected to cause injury or damage. (3) The grouping of related losses into a single loss situation.

Occurrence Policy
A liability policy that responds to claims for losses that took place during the policy period, regardless of when claims are made. As a result, claims can be filed years after the time the policy was in effect.

Ombudsperson
A person who hears and investigates complaints and acts as an impartial intermediary between the public and government or bureaucracy.

Onus of Proof
The burden or responsibility of proof, and is sometimes referred to by its Latin term, onus probandi.

Pair & Set Clause
Establishes that loss or damage to one of a pair or set of individual items does not represent the loss of the pair or set.

Parametric Insurance
Insurance that is triggered by a pre-defined event and generates a pre-determined payout, regardless of damage.

Peril
The event that caused a loss covered by the policy; for example, fire, windstorm.

Personal Articles Floater
A policy that covers certain kinds of personal property in a principal residence more broadly or for higher limits than do policies, such as a homeowners policy, of more general scope. A property appraisal is often required.

Personal Information
Any factual or subjective information, recorded or not, about an identifiable individual.

Personal Injury Liability
Injury other than bodily injury arising out of defined causes which usually include false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander or violation of a person's right to privacy other than in the course of advertising, broadcasting, television, publishing.

Personal Liability
Liability insurance for an individual’s personal liability exposures such as premises, personal activities, some contracts, and certain incidental coverages. This insurance does not include automobile liability or business-related losses.

Personal Lines Insurance
Insurance for individuals and families, such as private passenger auto insurance and homeowners policies.

Personal Property
Legally, any property of an insured other than real property. More often used to refer to the personal property of family members insured under a homeowners policy.

Physical Damage Coverage (Automobile)*
The section of an automobile policy that provides cover for damage to the insured vehicle. It may cover all perils, collision or upset, all perils other than collision or upset (comprehensive) or specified perils.

Pluvial Flooding
Flooding caused by rain.

Policy
Legally binding contract effecting insurance or certificates thereof, including all clauses, riders, endorsements and renewals.

Policy Conditions
Provisions which state the rights and duties of the insured or insurer.

Policy Limit*
The maximum amount an insurer will pay under a policy, either overall or under a particular coverage.

Policy Period
Duration of policy, most often one year in property and casualty insurance. Also called “policy term.”

Policyholder
Individual or other entity who owns an insurance policy; the insured.

Pollution Exclusion
Standard general liability policies include an exclusion for loss arising out of pollution. For certain exposures this exclusion may be modified. e.g., "sudden and accidental" pollution arising from a fire.

Pool
An organization of insurers or reinsurers through which particular types of risks are written with the premiums, losses, and expenses shared in agreed-upon amounts among the insurers belonging to the pool.

Premises
A building, including the land immediately surrounding it and belonging to it.

Premium
The price of insurance protection for a specified risk for a specified period of time.

Priorities of payment
A system that specifies how much of the minimum policy limit will apply to bodily injury claims and how much will apply to property damage claims in situations where there is not enough insurance to cover all the combined claims.

Privacy breach
The unauthorized collection, disclosure, use, access, destruction, or modification of personal information.

Private Passenger Vehicle
Four-wheeled motor vehicle of the private passenger, station wagon, or van type, designed for use on public highways and subject to motor vehicle registration.

Pro Rata Cancellation
Cancellation of an insurance policy or bond with the return premium credit being the full proportion of premium for the unexpired term of the policy.

Product Liability Insurance*
Protects manufacturers' and distributors' exposure to liability for bodily injury or property damage caused by the negligent manufacturing of the product. Also referred to in relation to claims arising out of completed work.

Product Recall Insurance
Insurance that indemnifies the insured for the cost of recalling products known or suspected to be defective.

Professional Liability Insurance
Protects professionals against liability for damages and the cost of defence arising from their alleged or real professional errors or omissions in the practice of their profession.

Proof of Loss*
A formal statement of facts about a loss, attested to by the claimant, in a form specified by the insurer. A proof of loss may need to be notarized. An insurer must respond to a proof of loss after a specified time period with a formal disposition of the claim (approved or denied).

Property and Casualty (or General) Insurance*
This is the branch of the insurance industry that covers home, car and business insurance. (The other branch of the industry is life and health insurance.)

Property Damage Liability Insurance
Protection against liability for damage to the property of another including loss of the use of the property.

Property Insurance
First-party insurance that indemnifies the owner or user of property for its loss, or the loss of its income-producing ability, when the loss or damage is caused by a covered peril, such as fire or explosion.

Proximate Cause
Cause of loss or damage. Unbroken chain of cause and effect between the occurrence of an insured peril and damage to property.

Public Adjuster
An insurance claims adjuster representing an insured on a fee basis in a claims settlement.

Punitive Damages
Damages in excess of those required to compensate the plaintiff for the wrong done, which are imposed in order to punish the defendant because of the particularly wanton or willful nature of their wrongdoing. Also called exemplary damages.

Quotation (Quote)
Premium that an insurer initially sets in its offer as the price to be paid by a potential insured.

Rate
Amount charged to an insured that reflects the expectation of loss for a covered risk, insurance company expenses, and profit. In other words, it is the basis of premium calculation for the insurance provided for the exposure.

Rating
The process by which underwriters apply the rates developed by actuaries to the information that underwriters have gathered to determine premium for individual risks.

Regulator
Generally, government agencies (federal, provincial, or territorial) that are responsible for setting rules and standards for the control, direction, governance, or oversight of the insurance industry.

Reinstatement
The reactivation of suspended or cancelled insurance.

Reinsurance
Insurance purchased by an insurance company from another insurance company (reinsurer) to provide it protection against large losses on cases it has already insured. Essentially, insurance for insurance companies. A transaction in which one party, the “reinsurer,” in consideration of a premium paid to it, agrees to indemnify another party, the “reinsured,” for part or all of the liability assumed by the reinsured under a policy of insurance that it has issued. The reinsured may also be referred to as the “original” or “primary” insurer or the “ceding company.”

Remote Cause
A cause that is not the proximate cause of loss and is separate from the proximate cause in a chain of events leading to a loss.

Renewal
A certificate which attests to the fact that an insurance policy has been extended for another term.

Renewal Certificate
A short-form certificate issued at renewal, referring to the expiring policy and stating that its provisions, clauses, and exceptions continue for another term.

Rent Insurance
A form of loss of use insurance protecting against loss of rental income. It is particularly valuable where a landlord may depend upon a rental income from his various premises to pay the mortgages. In event of fire, the rents may cease, but his obligation to pay the mortgage may continue.

Replacement Cost Clause
A provision, generally in property insurance coverage, to provide a substitute of the damaged or lost property with something similar, including having the same use but not necessarily identical to the property being replaced, without extra cost to the insured.

Residual Market
Special programs to ensure insurance availability for risks that, from an underwriting standpoint, are less desirable and more hazardous.

Rider
Another name for an endorsement.

Ridesharing
An arrangement set up by means of a website or mobile app in which a passenger travels in a private vehicle driven by its owner, for free or for a fee.

Risk
The chance of loss. Specifically, the possible loss or destruction of property or the possible incurring of a liability. Sometimes referred to as the subject of an insurance contract.

Risk Management
Analyzing a risk to quantify the potential for losses in a specific investment and to decide what is the appropriate action to take (or whether not to take action).

Robbery
The taking of another's property by force or threat of force.

Salvage
The remaining value of property after severe damage by fire or other peril. The overall loss is reduced by the salvage value. Undamaged property may be quite saleable, and some property may be only partially damaged, thus repairable and then saleable.

Schedule
1) A comprehensive list accompanying a policy to detail the property, locations and amounts insured, and the applicable conditions. 2) In rate making, the formula applied to determine a rate.

Schedule of Insurance
A list of items individually covered by a policy; for example, a list of jewels under a jewellery floater, a list of cars under one automobile policy, or a list of buildings under a fire policy.

Scheduled Property
Property specifically identified and assigned value individually in a policy covering several items.

Seasonal Risk
1) A risk occupied only part of the year, such as a summer dwelling. 2) In manufacturing, it may be a plant operating seasonally, such as a cannery.

Seepage
A slow flow of water that takes place over a more extended period of time than accidental discharge, usually through porous material.

Self-insurance
A means of assuming and managing risk by setting aside a pool of money that will be used for compensation in the event of a loss occurring.

Short Rate Cancellation
The cancellation by the insured of a policy before its natural expiration; the insurer pays a return premium that is less than the proportionate part that remains unearned.

Silent Cyber Risk
The possibility that property or liability insurance policies not meant to cover cyber losses will be required to pay them.

Single-limit Policy
A type of habitational policy where one insurance amount is shown encompassing the building and personal property.

Slander
The oral utterance or spreading of falsehood harmful to another's reputation. Libel is written; slander is spoken.

Smoke Damage
Essentially, the devaluation by smoke, not fire, of merchandise and property. Such damage is covered by the fire policy.

Social Host Liability (Liquor Liability)*
Potential liability for bodily injury or property damage arising out of the negligent serving or distribution of alcohol by a non-business enterprise (i.e. homeowner).

Special Damages
Actual loss from the natural, not the necessary, consequences of the subject of complaint; e.g., specific payments for medical bills or car repairs. In third party claims, it means the damages that may be proved with documents

Specified Perils
Perils insured against that are specifically named in a policy; losses resulting from the perils listed are covered under the policy. This is the flip side of all-risks coverage, where losses resulting from the perils listed are excluded.

Standard Forms
Any insurance form worded identically by all insurance companies, generally to meet the requirements of local legislation.

Standard Limits
The basic amounts of indemnity provided under a liability policy or the liability section of a policy. These limits can be increased by agreement, with an additional percentage charge.

Statement of Claim
A written statement by a plaintiff detailing the facts which support the claim against the defendant and the relief sought.

Statutory Conditions
Special prescribed and standardized conditions that the Provincial Insurance Acts require to be included in fire, automobile and accident and sickness policies.

Sublimit
A limitation in an insurance policy on the amount of coverage available to cover a specific type of loss.

Subrogation
Legal process by which an insurance company, after the payment of a loss, is assigned the rights of the insured to recover the amount of the loss from those who are legally liable for it.

Subsidiary
A company owned or controlled by another company.

Substandard risks
Below average or impaired risks, usually requiring a higher than usual insurance rate.

Surety
(1) One who guarantees the performance of the obligations of the principal to the obligee; one who assumes legal responsibility for the fulfilment of another’s debt or obligation and becomes liable if the other defaults. Can be an individual or a corporation, usually an insurance company, that guarantees the performance or faith of another. (2) The security given against loss or damage, or as a guarantee that an obligation will be met.

Tenant's Policy
A package policy specially designed to meet the normal insurance requirements of a private tenant covering personal belongings and liabilities.

Terrorism
An ideologically motivated unlawful act or acts, including but not limited to the use of violence or force or the threat of violence or force, committed by or on behalf of any group(s), organization(s), or government(s) for the purpose of influencing any government and/or instilling fear in the public or a section of the public.

Third Party
A claimant under a liability policy, so called because he is not one of the two parties (insured and insurer) who has entered into the insurance contract which pays his claim.

Third-party Liability Insurance (Automobile)
Insurance against the insured’s legal liability for injury to other people (bodily injury) and damage to the property of others (property damage) arising out of the ownership, use, or operation of an automobile.

Title Insurance
Insurance affording protection from loss arising out of a defect in a real estate title.

Tort
A legal wrong arising from a duty fixed by law. A breach of this duty that causes injury to persons or property is repressible by legal action for damages. Liability for tort involves a private or civil wrong or injury and is distinct from that under contract in that the duty is owed to people, generally, rather than to a specified individual.

Tortfeasor
A wrongdoer; a party guilty of a tort.

Total Loss
(1) Loss of all the insured property. (2) A loss involving the maximum amount for which a policy is liable.

Treaty
An agreement between an insurance company and a reinsurer. The reinsurer automatically accepts a portion of the ceding company’s liability for a specified class or classes of business. Terms of the agreement are set forth therein; for example, premium payment, loss limits, etc.

Trespass
An illegal act against another person's rights or property.

Umbrella Policy
A special form of liability policy designed to protect the insured for certain unknown contingencies over and above the normal coverages and to provide excess insurance.

Underinsured Motorist Coverage
An optional bodily injury and property damage coverage that applies in an accident involving a third party who does not carry adequate liability insurance.

Underwriter
(1) The insurance company or group that underwrites or insures a particular risk. (2) The individual within an insurance company whose responsibility it is to accept or reject business in the particular line in which they specialize and, in this way, choose the risks their principals are prepared to underwrite.

Underwriting Rules
The rules used by insurance companies to assess the insurability of a particular risk. These rules are set individually by insurance companies and may differ for each class of business.

Unidentified Motorist
A motorist who may or may not be at fault for an accident but has fled the scene without being identified.

Uninsured Motorist
One who drives an automobile without the statutory minimum required insurance; usually discovered after an accident.

Uninsured Motorist Coverage
A form of insurance that pays for the bodily injury or property damage caused by the owner or operator of an automobile that is not insured. Insurance is available to a policyholder and family members if they are injured by a hit-and-run motorist or driver who carries no liability insurance and is at fault for the accident. Where the person at fault is not insured or there is a verifiable hit-and-run, a government fund may provide coverage up to the statutory limit.

Unnamed Insured
A party who is not named in an insurance policy but who nevertheless is covered by the policy.

Unoccupied Building
Where the premises contains contents but no human beings; when such persons are temporarily away from the premises (on vacation, for example), the premises are said to be “unoccupied.” This is distinguishable from “vacant”; in vacancy, the contents have been moved out, leaving nothing but the building.

Utmost Good Faith
A legal principle calling for the highest standards of integrity on the part of the insured and the insurer.

Vacant Building
A building where all occupants have moved out with no intention to return, or where no new occupant has moved in. The building may or may not be furnished.

Valuable Papers Insurance
Insurance that protects a business’s valuable documents, such as architectural drawings, law libraries, medical reference books, etc.

Valuation
An estimate or the act of assessing of value. This is frequently done through the process of an appraisal.

Valued Policy
A policy which provides that a special amount shall be paid in the event of a total loss of the property.

Vandalism and Malicious Mischief
The wilful injury or destruction of property. Insured against by the extended coverage endorsement of a property insurance policy.

Vehicle identification number (VIN)*
This is the number usually found on the dashboard of a vehicle on the driver's side, and is usually listed on the vehicle registration and title. The VIN is a combination of letters and numbers 17 characters in length that can be used to identify the make, model, and year of a car.

Vicarious Liability
A situation in which one party—for example, an employer—is held partly responsible for the unlawful actions of a third party, an employee. Vicarious liability can arise in situations where one party is supposed to be responsible for (and have control over) a third party, and is negligent in carrying out that responsibility and exercising that control.

Void Policy
A policy that is treated as if it never existed.

Waiver
The intentional relinquishment of a known right. A waiver under a policy is required to be clearly expressed and in writing.

Waiver of Co-insurance
A fire insurance contract clause that states that co-insurance does not apply unless the amount of loss exceeds a certain amount.

Waiver of Subrogation
A special type of waiver that is a pre-loss voluntary relinquishment by an insurer of its right to seek the reimbursement of its payment for damages that were caused by a party other than the insured.

Warranty
Statement or stipulation or promise in an insurance contract, the breach of which may nullify the contract.

Water Damage Clause
A portion of the policy affording coverage for certain specific causes of water damage.

Windstorm Insurance
Protection against damage done to property by unusually high winds, cyclones, tornadoes or hurricanes. This coverage is available under the extended coverage endorsement of property policy.

Wrap-up Liability Policy
One liability policy insuring the legal liability of all the involved interests (owner, contractor, subcontractor, architects, engineers, and other participants) of a large construction project. Coverage is generally arranged by the project owner or the general contractor.