Glossary of Insurance Terms
Printed with permission from the Insurance Institute of Canada.
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Care, Custody and Control
Cargo
Cash Surrender Value
Casualty Insurance
Cede
Certified Copy
Canadian Chartered Insurance Broker (C.C.I.B.)
C.C.I.B.
C.I.P.
Chartered Insurance Professional (C.I.P.)
Civil Code
Civil Commotion
Claim
Claimant
Claims Examiner
Claims Made Basis
Clause
Co-insurance Clause
Co-insurer
Collapse
Collision
Collusion
Commercial Property Floater
Common Carrier
Common Law
Comprehensive General Liability Policy
Comprehensive Personal Liability
Conditions
Conditions of the Contract
Condominium
Consequential Loss
Consideration
Constructive Total Loss
Contract
Contract Documents
Contractor's Liability Insurance
Contributory Negligence
Cover
Coverage
Credit Report
Custody
Care,
Custody and Control
A term used primarily in liability coverages which refers
to property belonging to another but which is legally in
the insured's possession or under his control.
Cargo
Goods being transported, such as the load of a truck or
the goods being carried by a ship. The cargo of a ship
does not include the equipment needed to operate the
ship.
Cash
Surrender Value
When an insured wishes to cancel a life insurance
policy before the full term, the policy may have a cash
value which is stipulated in the policy. The longer the
policy is in force, the higher the cash value is likely
to be. It is a sum paid back by the life insurance
company to the insured when an insured requests the
termination of the policy.
Casualty Insurance
Loosely used to describe an area of insurance not
particularly or directly concerned with life insurance,
fire insurance or automobile insurance. Most frequently
refers to liability, burglary and plate glass insurance
but may include Fidelity and Surety.
Cede
An insurer cedes part of a risk to a reinsurer when it
transfers or reinsures part of the risk.
Certified Copy
Reproduction of a document, that authority having custody
of original signs and attests as a true, genuine and
authentic copy.
Canadian
Chartered Insurance Broker (C.C.I.B.)
A professional designation earned by examination
following study courses.
Chartered
Insurance Professional (C.I.P.)
A professional designation (Canada) earned by the
successful completion
of several educational requirements as designated by the
Insurance Institute of Canada.
C.C.I.B.
See Chartered
Insurance Broker.
C.I.P
See Chartered
Insurance Professional.
Civil Code
1) The civil law of the Province of Quebec.
2) The reduction of law to a set of rules. In some
countries for example, France, most of the laws of the
country were at one time reduced to a set of rules after
the style of the Roman Code although these too have
subsequently been subject to certain new statutes. In
some jurisdictions, certain sections of the law are
reduced and simplified to a "Civil Code."
Civil Commotion
Disturbance involving a large number of individuals. An
uprising of people creating a prolonged disturbance.
Claim
Strictly speaking, a claim is the exercising of the right
of an insured to be indemnified by his insurance company
for damage suffered. It is frequently used, however, to
indicate the amount of the claim.
In practice, it is any notification of a possible loss under an insurance policy whether any payment is likely to follow or not.
For every claim that is reported, the insurance company must set aside reserves equal to the figure which it is anticipated the claim will cost.
Claimant
One who makes a claim.
Claims Examiner
An employee of an insurer who handles and is responsible
for incoming claims.
Claims Made Basis
Provision in some insurance and reinsurance contracts
covering only claims made during term of the contract.
Clause
Words in a policy which describe certain specifications,
limitations or modifications.
Co-insurance
Clause
A clause in an insurance policy requiring an insured to
carry a certain percentage, usually 80, 90 or 100 per
cent of insurance in relation to the value of the
property insured. If the insured fails to do this, then
he agrees to be a self-insurer of all losses large or
small in the same ratio as his failure to comply with the
percentage required, is related to the insurance
required. For example, a building valued at $100,000 with
an 80 per cent co-insurance clause would require
insurance coverage of $80,000. If coverage is carried for
only $40,000 then the insured is a self-insurer or
coinsurer for $40,000 of the $80,000, and the insurance
company would be responsible for the same amount. This
ratio would apply even if a loss were only $5,000. Then
the insurance company would pay $2,500 and the balance or
coinsurance penalty of $2,500 would be borne by the
insured.
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
A vehicle or a ship collides when it strikes another
object or another vehicle or ship. Collision insurance
insures against loss so caused.
Collusion
A secret agreement between persons to defraud another,
e.g., an insured driver of an automobile and his
passenger may misrepresent the facts of an accident in
order to have monies paid to the passenger under the
insured's automobile insurance policy.
Commercial
Property Floater
Property used in a business which requires it to be moved
from place to place, may be insured on one of the forms
of commercial property floaters. A television studio, for
example, may require insurance on their equipment even
though it may be out of the regular studio much of the
time. In most instances, these are written on special
forms suited to the particular need such as contractor's
equipment floater, inland marine block policy, jeweler's
block policy, salesman's floater policy, etc.
Common Carrier
One who offers to transport merchandise for hire and must
accept shipments from anyone who wishes to use the
services. Different laws and rules govern common carriers
than do private or contract carriers who only transport
the goods of those with whom they have made agreements.
Common Law
American, Canadian and British law derives its force and
authority from the universal consent and practice of the
people over the years. Certain aspects of the law are
written into statutes. The underlying principles and
usages and rules of action which do not rest for their
authority on this statutory or legislative law are to be
found in principles set forth by decisions of the Courts
over the years.
Many rules were promulgated in feudal times. During the reign of Henry II (beginning 1154 AD) the King's Courts became organized and common law began to evolve. The Courts met frequently and when one Court made a decision in connection with a certain issue, that decision was followed by the other courts and became the law unless modified by statue or by gradual evolution.
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.
Comprehensive
Personal Liability
A form of liability insurance for individuals which
insures the policyholder in the event he has become
liable to pay money for damage or injury he has caused to
others. This form does not include automobile liability,
but does cover almost every activity of the policyholder
except those which arise from the operations of a
business. Hence "Personal" Liability.
Conditions
The general terms or requirements upon which the
insurance is based. For the mutual understanding of the
parties the conditions will commonly state such matters
as how the policy can be cancelled or renewed, provisions
with respect to change of the insured's interest,
provisions as to what an insured should do in the event
of a loss, and conditions as to what he should do
subsequent to a loss etc.
A condition precedent is one that must be fulfilled prior to the general fact at stake. The insured, for example, is required to give notice of a claim and fulfill certain other obligations as a condition precedent to his receiving a settlement.
A condition subsequent is one which is applicable subsequent to the event, as for example, the insured is required to co-operate in the disposition of the claim and to co-operate, other than in a monetary way, to assist to recover from anyone who is responsible for the loss.
Conditions
of the Contract
Articles in contract defining or describing terms,
responsibilities of owner and contractor, performance and
payment schedules, and the like.
Condominium
Is the individual ownership of a single unit in a
multiple unit building or group of buildings, together
with a percentage interest in that part of the total
property owned jointly by all unit owners. In an
apartment building, each apartment would be a unit and
the stairways, pathways and parking areas would be in
common ownership. Condominium property requires special
insurance treatment.
Consequential Loss
The word "consequential" means something
following as an effect or result. It is an indirect
result of the occurrence that causes the loss.
The difference between a direct loss and a consequential loss can be seen in the destruction of a power station by wind. The damage to the power station is a direct loss by wind. There is actual physical damage directly resulting. The destruction of the power station also interrupts the generation of power by the station. For example, a cold storage plant is without electrical power. Foodstuffs spoil as a result or as a consequence. This is a consequential loss, not a direct loss.
Consideration
The inducement to a contract; the cause, motive or price
which induces a contracting party to enter into an
agreement, act or forbearance or promise thereof. It is
an essential part of a binding contract. Consideration is
either expressed or implied.
The money, or whatever is being used in substitution of money, paid for the article or contract is "the consideration."
Constructive
Total Loss
A partial loss but where the damage is so extensive that
repairs would cost as much or more than the repaired
property would be worth, or the limit of insurance.
Contract
An agreement made between two or more persons, which is
intended to be enforceable at law, and is constituted by
the acceptance by one party of an offer made to him by
the other party, to do or to abstain from doing some act.
The offer and acceptance may either be expressed or
inferred by indication in the conduct of the parties.
Contract Documents
Agreement, addenda, supporting documents, general
conditions, supplementary conditions, specifications and
drawings and modifications to an agreement.
Contractor's
Liability Insurance
Insurance protecting contractor from defined liability
claims arising from contractor's operations.
Contractual
Liability
Liability assumed by a contract either written or
implied. Legal liability policies are based upon
liability in tort or negligence and have very little
coverage normally for contractual liability (with a
possible exception of such matters as sidetrack
agreements, etc.) However, contractual liability may be
covered in many instances as an additional risk with an
additional premium.
Contributory
Negligence
Many accidents are the fault of both parties who are
involved in the occurrence. The plaintiff who sues
another party for damages also may be guilty of some
negligence, which is a concurrent cause of the damage.
Such a party is guilty of contributory negligence.
Cover
To protect with insurance, or the insurance protection
provided.
Coverage
The nature of protection afforded by a particular policy.
Can be used at times interchangeably with
"insurance" or "protection" as
"fire coverage" or "fire protection"
or "fire insurance."
Credit Report
A report provided by a commercial credit reporting
company which provides details on the reputation and
financial strength of an individual or corporation.
Custody
Immediate control that an authority exercises over
property or people.
