Glossary of Insurance Terms

Printed with permission from the Insurance Institute of Canada.

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A B C D E F G H I J L M N O P Q R S T U V W

Obsolescence
Occupancy
Occurrence
Off Premises Clause
Operations
Optional Settlement Clause
Other Insurance
Outboard Motor Boat and Outboard Motor Policy
Overlapping Insurance
Owner's, Landlord's and Tenant's Liability

Obsolescence
Impairment of desirability and usefulness brought about by changes in public preference or by forces in addition to those which cause deterioration. Functional obsolescence refers to impairment of functional capacity or efficiency. Economic obsolescence refers to impairment of desirability or utility arising from economic forces such as changes in highest and best land use, legislative enactments which restrict or impair property rights, and changes in supply demand relationships.

Occupancy
Occupancy is the act of holding possession of 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.

Occurrence
A happening or event. Liability policies are usually written on either an accident or occurrence basis. For coverage on an accident basis, the loss or damage must be due to accident, whereas on an occurrence basis all that is required is the happening or the continual or repeated exposure to an unfavourable situation, neither intended nor expected to cause injury or damage. In reinsurance and insurance, it is also the grouping of related losses into a single loss situation.

Off Premises Clause
A provision in residential policies affording coverage on some of the household goods when away from the premises. within certain limits.

Operations
The business of an Insured or the type of business of an Insured.

Optional Settlement Clause
A clause in an insurance policy permitting the insured under certain circumstances to have a choice of benefits.

In accident and health policies the insured may have a choice of payment of various amounts as periodical indemnity for a certain period of time or a lump sum settlement of a pre-determined amount set out in the policy.

Other Insurance
Normally an insured must disclose to an insurance company from whom he is purchasing insurance, information about what insurance he already carries on the property.

As a matter of principle, the insured should also advise existing insurance carriers of new policies which he is taking out. This is an essential point in the matter of disclosure.

It is however frequently waived, as the more routine policies carry some such wording as "other concurrent insurance permitted without notice until required."

Outboard Motor Boat and Outboard Motor Policy
A class of inland marine insurance covering boats, motors and equipment for named perils (fire, collision and theft) or, at a higher premium, for all risks. Some policies include liability cover for property damage to other vessels.

Overlapping Insurance
When two different kinds of policies cover the same loss, the insurance is said to be "overlapping." This does not mean, for example, when two fire insurance policies cover the same loss, which is called "contributing insurance." However, if an inland marine policy and a fire policy covered the same loss, they would be overlapping.

Owner's, Landlord's And Tenant's Liability
Liability insurance coverage which gives protection because of liability arising out of ownership, use or occupancy; operation or maintenance of buildings or premises.