A system in
which individuals and businesses share risks by contributing to
a fund out of which those who suffer losses are paid.
Uncertainty
about future events.
A risk that
involves the possibility of gain or loss.
A risk that
involves only the possibility of loss or no loss.
Conserving the
earning power or assets of a firm or an individual by minimizing
the financial effect of accidental losses.
Avoiding a
risky situation by ceasing to participate in it or by not
entering into the risky activity at all.
Techniques
designed to prevent, minimize, or reduce losses.
The practice
of covering a firm's losses with its own funds.
The transfer
of risk to another individual or firm.
An arrangement
among three parties the principal the obligee, and the surety&-whereby
the surety guarantees financial reimbursement to the obligee, if
the principal fails to fulfill its obligation.
A type of
surety bond that guarantees the principal's character,
integrity, and honesty.
A sales
promotion technique in which some item is offered free or at a
bargain price in return for buying a specified product or a fee
paid to an insurance company in return for the insurance
company's acceptance of a certain risk.
A formal
agreement in which an insurer promises to pay a policyholder a
specified amount in the event of certain losses.
An agreed&-upon
amount of the loss that an insured party must absorb before
getting reimbursement from the insurer.
The
statistical principle that the larger the number of cases
involved, the more closely the actual rate will be to the
statistically calculated rate.
A private
insurance company that sells its stock to the public.
A private
insurance company that is owned by its policyholders.
The process of
determining which applications for insurance should be accepted
(and which should be rejected) and deciding the rates that will
be charged by the insurer.
A person or
business that represents an insurance company and is paid by
that insurer to sell its insurance.
A freelance
agent who represents insurance buyers, working on their behalf
and seeking the best coverage for them.
Insurance
covering losses resulting from damage to the persons or property
of other people or firms.
In business, a
firm's responsibility for the actions of its employees.
In business,
the responsibility of an individual for the actions performed in
a professional capacity.
A form of tort
in which a company is held responsible for injuries caused by
its product; a firm's responsibility for its product
In business, a
firm's responsibility for occurrences on its premises.
Coverage
provided by a firm to its employees for medical expenses, loss
of wages, and rehabilitative service costs incurred as a result
of job&-related injuries.
A form of auto
insurance in which the parties injured in an accident are
compensated by their own insurers for bodily injuries and
property damage, regardless of which party is at fault.
Insurance that
covers losses over and above those covered by a standard policy
as well as losses excluded by a standard policy.
Insurance
covering losses resulting from physical damage to or loss of
real estate or personal property.
Insurance
coverage that provides the insured with sufficient funds to
replace any destroyed or damaged property.
Insurance
coverage that provides the insured with an amount that deducts
for the prior use of the property before it was damaged.
The
requirement made by insurance companies that policyholders
insure to a certain minimum percentage of the total value of the
property.
A form of
transportation insurance covering both the act of transportation
(by land, water, or air) and the transported goods.
Insurance
guaranteeing that a seller has clear legal right to sell a
certain piece of property.
Insurance that
covers losses incurred during times when a company is unable to
conduct its business.
Insurance that
covers losses incurred by a firm whose business is interrupted
because it is dependent on another business that suffers damage.
Insurance that
protects a firm against its customers' failure to pay their
bills.
Insurance that
pays benefits to the survivors of a policyholder and that may
also pay a cash value that can be claimed before the
policyholder's death.
The person to
whom the benefits of a life insurance polity are paid.
Insurance
coverage in force for the full duration of a person's life.
Insurance
coverage in force for a term of 1, 5, 10, or 20 years.
Insurance that
pays the Face value of the policy after a fixed period of time
whether the policyholder is alive or dead.
A life
insurance policy that combines term life insurance with the
higher yields of money market funds and similar investments.
A modified
form of whole life insurance that allows flexibility regarding
the minimum value of the policy, the types of investments
supporting the policy, and the amount and timing of the
premiums.
Insurance that
is underwritten for a specific group as a whole rather than for
each individual in that group.
Insurance
covering losses resulting from medical and hospital expenses
and/or from loss of income because of injury or disease.
An organized
health&-care system providing comprehensive medical care
for which its members pay a fixed fee.
An arrangement
whereby selected hospitals and/or doctors agree to provide
services at reduced rates and to accept thorough review of their
recommendations for medical services.
A government&-sponsored
program that funds medical services for the elderly.
A government
program that makes health&-care services available to low&-income
individuals and families.
The practice
of building up a pool of funds as a reserve to cover losses
rather than taking out a commercial insurance policy.
