Glossary of Insurance Terms
Printed with permission from the Insurance Institute of Canada.
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Earned Premium
Earthquake Insurance
Effective Date
Employers Liability Insurance
Encumbrance
Endorsement
Equipment
Estate
Estimate (Bid Function)
Estimated Premium
Estoppel
Exclusion
Experience
Expiry
Explosion
Extended Coverage Insurance
Extra Expense Insurance
Earned Premium
1) That portion of premium earned or charged for the
period of time a policy remained effective. For example,
an annual policy paid for in advance would be one twelfth
"earned" at the end of the first full month of
its term.
2) An amount calculated by taking earned premium reserve
at beginning of period plus premium written during
period, less unearned premium reserve at end of period.
3) Premium actually exposed to loss.
Earthquake
Insurance
Insurance against damage by earthquake.
Effective Date
The date of inception of an insurance policy, or the date
additional coverages become effective.
Employer's
Liability Insurance
Coverage for legal liability imposed on an employer to
pay damages to an employee injured by the employer's
negligence. This is not Worker's Compensation Insurance
where special acts of legislature set out specifically
the relationship between the employer and employees in
certain circumstances and formula by which awards in each
case are computed.
Encumbrance
Mortgage, lien or other charge against a property.
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
"equipment" of the car. They are instead the
dealer's "stock of tires." Equipment also
includes contractor's equipment, e.g., backhoe,
bulldozer.
Estate
1) In law, one of the various interests in land.
2) The net worth of an individual's worldly goods.
Estimate
(Bid Function)
Costs a contractor anticipates for a project.
Estimated Premium
A tentative premium set in the anticipation of being
approximately correct but which may be increased or
decreased when the final premium calculation is made.
Estoppel
A bar created when someone by his action or lack of it
indicates that he will not exercise a right he has. He
stops himself from exercising his right later, e.g., if A
owns a pen and stands by and watches B sell the pen to C,
as if the pen belonged to B, then A cannot later reclaim
the pen, arguing that it was his.
Exclusion
Risks, perils or properties defined in the policy as not
covered.
Experience
Comparison of premiums earned with claims incurred for:
a) an individual insured b) group of insureds c) class of
coverage.
Expiry
End of the policy period.
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.
Extended
Coverage Insurance
An endorsement that enlarges the coverage afforded by the
primary policy. Coverages such as windstorm, hail, smoke,
riot are extended coverages on a fire policy.
Extra
Expense Insurance
A form of insurance policy covering the extra expense of
an insured in carrying on a business following a loss by
an insured peril.
