Glossary of Insurance Terms
Printed with permission from the Insurance Institute of Canada.
Please choose a letter to continue:
Package Policy
Pair and Set Clause
Partial Loss
Peril
Perjury
Personal Auto Policy
Personal Effects Floater
Personal Injury Liability
Personal Lines
Personal Property
Personal Property Floater (PPF)
Policy Conditions
Policy Limit
Policy Provisions
Policy Year
Policyholder
Pollution Exclusion
Power of Attorney
Preferred Risk
Premises
Premium
Prescription
Principle of Indemnity
Private Passenger Car
Product Liability
Products and Completed Operations Insurance
Professional Liability Insurance
Proof of Loss
Property Damage Liability Insurance
Property Insurance
Pro Rata Cancellation
Proscription
Protected
Protection
Proximate Cause
Punitive Damages
Package Policy
Any insurance policy which covers two or more lines or
types of insurance in the same policy.
Pair and
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.
Partial Loss
A loss covered by an insurance policy where the property
or the premises are not completely destroyed or rendered
completely worthless.
Peril
The event that caused a loss covered by the policy, e.g.,
fire windstorm.
Perjury
Giving false evidence or information while under oath.
Personal
Auto Policy
Insurance policy issued to individuals covering risks
arising out of the ownership or operation of a licensed
automobile.
Personal
Effects Floater
A policy covering personal effects usually carried by
tourists. Can be all risk or specified peril form. Covers
worldwide but excludes coverage at the insured's
residence.
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 Lines
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 Homeowner's
policy.
Personal
Property Floater (P.P.F.)
A Broad Form policy covering all personal property
worldwide including at the insured's home, usually on an
all risks basis.
Policy Conditions
Provisions which state the rights and duties of the
insured or insurer.
Policy Limit
The maximum that the insurance company is obligated to
pay in actual claims under an insurance policy. Certain
additional costs may also need to be paid.
Policy Provisions
Statements contained in an insurance policy which explain
the benefits, conditions and other features of the
insurance contract.
Policy Year
Period between anniversary dates.
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.
Power of Attorney
Authority given one person or organization to act for and
obligate another to the extent of the instrument creating
the power.
Preferred Risk
Any risk considered to be better than the average risk on
which the premium rate was based.
Premises
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.
Prescription
In law, a limitation of time within which legal action
can be taken by a claimant. In insurance, the period of
time in which a claim may be brought by the policyholder.
Also Proscription.
Principle
of Indemnity
The concept that an insured will be reimbursed for his
loss (subject only to the policy limit and terms). If
there is no loss there can be no indemnity.
Private
Passenger Car
Four-wheeled motor vehicles of the private passenger,
station wagon or van type, designed for use on public
highways and subject to motor vehicle registration.
Product Liability
Liability insurance, generally for contractors, for
products liability and for claims arising out of
completed work.
Products
& Completed Operations Insurance
Liability insurance, generally for contractors, for
product liability and for claims arising out of completed
work.
Professional
Liability Insurance
Protects professionals against liability for damages and
cost of defense based upon his/her alleged or real
professional errors and omissions or mistakes, e.g.,
architects, engineers, medical malpractice, attorneys.
Proof of Loss
A formal statement made by a policy owner to an insurer
regarding a loss. It is intended to give information to
the insurer to enable it to determine the extent of its
liability.
Property
Damage Liability Insurance
Protection against liability for damage to the property
of another including loss of the use of the property.
Property Insurance
Covers an insured's property against damage, destruction
or loss by a covered peril.
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.
Proscription
Outside the time period in which a legal action can be
commenced. See also Prescription.
Protected
In fire insurance, a risk located in an area protected by
a fire department.
Protection
Used interchangeably with "coverage" to denote
insurance provided under the terms of a policy.
Proximate Cause
Cause of loss or damage. Unbroken chain of cause and
effect between the occurrence of an insured peril and
damage to property.
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 character of his wrongdoing.
