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Mobile agricultural machinery and equipment coverage form

Farm coverage form that provides separate coverage for a farmer’s mobile agricultural machinery and equipment.

Mobile equipment endorsement

Commercial auto endorsement that makes mobile equipment considered a covered auto for coverage purposes.

Mobile home insurance

Coverage that protects both a mobile home structure and its contents; some companies have mobile home package policies that provide property and liability insurance for owners of mobile homes. In addition, there is a mobile homeowners endorsement that can be attached to an HO-2 or HO-3 to modify coverage for mobile homeowners.

Modular policy

An insurance policy that consists of several different documents, non of which by itself forms a complete policy.

Monoline company

Insurance company that writes a single line of insurance.

Monoline policy

Insurance policy that provides one type of insurance coverage.

Monopolistic state fund

Method of providing workers’ compensation coverage used in some states; employers must purchase workers’ compensation insurance from a state fund; private insurance companies are not allowed to compete.

Monopolistic states

Employers can purchase a workers’ compensation policy only from the state. Only four monopolistic states are still in operation: North Dakota, Ohio, Washington and Wyoming.

Moral hazard

Hazard created by an individual who would be willing to create a loss situation on purpose just to collect from the insurance company.

Morale hazard

Hazard created by an individual’s tendency to contribute to a loss through his own irresponsible actions or carelessness.

Mortgage condition

Condition found in property insurance policies that specifies the rights and duties of the mortgagee under the policy; also called the loss payable condition.

Mortgagee rights

Rights granted to a mortgagee under a property contract issued to a mortgagor by virtue of the mortgagee’s financial interest in the property.

Motor Carrier Act of 1980

Federal regulation that requires truckers and other commercial carriers to certify they are able to meet financial obligations if they become liable for injury or damage arising from their trucking operations.

Motor carrier coverage form

Commercial auto coverage form that is an alternate to the truckers coverage form; it can be used to cover anyone who transports property by auto in a commercial enterprise.

Motor truck cargo policy

Nonfiled commercial inland marine policy that protects a carrier against its liability for damage to domestic shipments in its custody.

Multiline company

Insurance company that writes more than one line of insurance.

Mutual company

Insurance company owned by its policyholders; the policyholders share in profits made by the company through dividends or reductions in future premiums.

Mysterious disappearance

Vanishing of property with no explanation.

Name schedule bond

Type of fidelity bond that covers loss only from named employees.

Named insured

Person, business, or other entity named in the declarations to whom the policy is issued.

Named nonowner coverage endorsement

Personal auto policy endorsement that provides coverage for the use of nonowned autos to individuals who do not own a car.

Named peril

Named peril policies specifically list the causes of loss covered by the policy. If the cause is not listed, there is no coverage.

Named peril policy

Insurance policy that insures only against perils specifically listed in the policy; also called specified peril policy.

National Association of Insurance Commissioners (NAIC)

Organization made up of individual state insurance commissioners whose purpose is to promote uniformity in regulation by drafting model laws and regulations.

National flood insurance program

Program run by the federal government that makes flood insurance available to eligible communities at subsidized rates; includes coverage for both buildings and personal property.

Nationwide definition

Document that categorizes and classifies risks that are eligible for ocean or inland marine insurance.

Natural perils

Fire, lightning, flood, wind, etc.

Natural person

A flesh and blood human being.

Negligence

The lack of reasonable care that is required to protect others from the unreasonable chance of harm.

Negligence per se

A breach of duty because the law says it is.

Negligent conduct

Failure to act or behave in the manner a reasonably prudent person would act in the same situation.

Net income loss exposure

A condition that presents the possibility of loss caused by a reduction in net income.

No benefit to bailee condition

Condition found in some property insurance contracts that states that a bailee is not covered under an insured’s policy while the bailee has possession of the insured’s property.

No-fault insurance

Form of automobile insurance where each insurance company pays the damages of its own insureds, regardless of who was at fault for the accident; no-fault insurance has been enacted in several states.

Non-admitted insurer

Company that is not authorized to do business in a particular state; also called an unauthorized insurer.

Non-concurrency

Situation that exists when the same property is covered by more than one policy, but the policies are not identical as to the extent of coverage provided.

Non-delegable duty

A requirement placed on one individual or entity by reason of relationship which cannot be passed to a third party.

Non-filed form

Type of commercial inland marine form that is not standardized and cannot be included in the commercial inland marine coverage part of the commercial package policy.

Non-renewal

Decision made by an insured or insurance company to not continue coverage for another policy period after the current policy period expires.

Non-reporting policy

Type of insurance policy for which a flat premium is charged every time the policy is renewed.

Non-special flood hazard Area

Non-special flood hazard areas are historically delineated with “B,” “C” or “X.” These are considered areas of moderate or minimal flooding hazard, generally only expected to flood in times of severe storms and weather conditions or when drainage problems exist.

Normal bad debt

The amount of bad debt usual and customary to a particular business.

Objective risk

The measurable variation in uncertain outcomes based on facts and data.

Obligee

In bonds, the party to whom the principal makes the promise and for whose protection the bond is written.

Occupational

An injury arising out of and in the course and scope of employment.

Occupational disease

Illness directly attributable to work conditions and exposures; such injury or illness must arise out of and in the course and scope of employment.

Occurrence

A loss that occurs at a specific time and place or over a period of time.

Occurrence form

Commercial general liability coverage form that covers bodily injury or property damage that occurs during the policy period, regardless of when the claim is made.

Ocean marine insurance

Insurance designed to provide broad coverage for cargo and ships in transit over sea; includes cargo insurance, hull insurance, freight insurance, and protection and indemnity insurance.

Offer and acceptance

One of the elements of a legal contract; means that a contract must involve two parties: one who makes an offer and another who accepts the offer; also called agreement.

Open competition

Method of rate and form regulation used by some state insurance departments that allows insurance companies to compete openly with the forms and rates they select, subject only to requirements of adequacy and nondiscrimination.

Open peril policy

Insurance policy that protects the insured from losses caused by any peril that is not specifically excluded by the policy; also called all risk and special coverage.

Operational capability

An entity’s ability to operate at or near pre-loss production or sales capacity.

Operational continuity

The ability of the business to continue to operate and produce some amount of goods or services following a loss-induced business suspension.

Operational risks

Uncertainty surrounding the ability to produce or provide the goods or services promised; the ability to satisfy the customer; and the continuation of a good reputation.

Optional limits transportation expenses coverage endorsement

Personal auto policy endorsement that allows the insured to select the daily and maximum limits of coverage provided for transportation and loss of use expenses.

Ordinance or law coverage endorsement

Endorsement used with the commercial property coverage part to provide coverage for demolition costs and increased construction costs required or regulated by law or ordinance.

Ordinary employee

These are employees not classified as officers, executives, department managers, employees under contract or any specifically listed employee or job description./p>

Ordinary payroll

Payroll of ordinary employees.

Other insurance condition

Policy condition that sets out how any other insurance that applies to the same loss will affect reimbursement under the policy.

Outboard motor and boat insurance

Insurance against physical damage to boats; usually provided by inland marine forms.

Owners and contractors protective liability coverage form

Commercial general liability coverage form that covers claims caused by the negligence of a contractor or subcontractor hired by the insured.

Package policy

Policy that includes more than one type of insurance coverage; also called a multiline policy.

Pair or set condition

Loss settlement condition found in property insurance contracts that states that when part of a set is damaged or destroyed, the insured will not be reimbursed for the value of the entire set; various methods are used to determine the amount of reimbursement.

Parcel post policy

Nonfiled commercial inland marine policy that covers mail sent by parcel post.

Particular average loss

In ocean marine insurance, any partial loss that does not arise from a general sacrifice of property (jettison).

Payment bond

Type of surety bond that guarantees bills for labor and materials will be paid to the contractor as they are due; also called labor and materials bond.

Peak season endorsement

Endorsement attached to the commercial property coverage part to provide increased coverage during particular seasons of the year when the insured’s inventory is at higher levels than usual.

Performance bond

Type of surety bond that guarantees that jobs will be completed by the contractor according to the contract specifications.

Peril

The cause of loss.

Perils of the sea

Perils to which property in transit by water is exposed; includes unusual action of wind or waves, stranding, lightning, collision, and sinking.

Permitted incidental occupancies endorsement

Homeowners policy endorsement that covers the insured’s business activities conducted on the residence premises.

Personal articles form

Personal inland marine form that provides scheduled coverage for nine optional classes of personal property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections, and coin collections.

Personal auto policy

Auto policy that provides property and liability coverage for both owned and nonowned autos used, maintained, or operated by the insured and her family members.

Personal contract

One of the characteristics of an insurance contract; means that an insurance contract insures a person, not property.

Personal effects form

Personal inland marine form that covers an insured’s personal belongings, such as baggage, while traveling.

Personal injury

Injury other than bodily injury arising out of such things as libel, slander, false arrest, wrongful entry, violation of privacy, and malicious prosecution.

Personal injury endorsement

Homeowners policy endorsement that modifies the definition of bodily injury to include personal injury.

Personal liability and medical payments to others endorsement

Endorsement to the dwelling policy that provides liability coverage similar to that provided by Section II of the homeowners policy; may also be purchased as a separate policy.

Personal lines

Insurance coverages that protect individuals and their families.

Personal loss exposure

Any condition or situation that presents the possibility of a financial loss to an individual or a family by such causes as death, sickness, injury or unemployment.

Personal property

All tangible or intangible property that is not real property.

Personal property floater risks

Category of the nationwide definition that includes risks eligible for personal inland marine insurance.

Personal property form

Personal inland marine form that provides open peril coverage for personal property.

Personal property replacement cost endorsement

Homeowners policy endorsement that adds replacement cost coverage for personal property.

Personal yacht insurance

Type of personal watercraft policy written for large pleasure boats.

Personnel loss exposure

A condition that presents the possibility of loss caused by a person’s death, disability, retirement or resignation that deprives and organization of the person’s special skill or knowledge that the organization can’t readily replace.

Physical hazard

Hazard that arises from the condition, occupancy, or use of the property itself.

Physicians and surgeons equipment form

Filed commercial inland marine form that covers medical instruments on and off the premises and furniture and fixtures at the doctor’s office against direct physical loss.

Policy

An insurance contract.

Policy condition

Any provision that qualifies an otherwise enforceable promise made in the policy.

Policy jacket

Document used to assemble an insurance policy; contains general conditions or the declarations page, but provides no coverage in and of itself; a policy form must be attached to make it a complete policy; also called a skeleton policy.

Policy limit

Maximum amount the insurance company will pay for a particular loss or for losses sustained during a period of time; also called limit of coverage, limit of insurance and limit of liability.

Policy period

The date and time specified in the declarations for when coverage begins and ends.

Policy territory

Place where coverage under a policy applies.

Polling letter

A letter sent to all staff members who would or should have knowledge of any acts or omissions that could give rise to a claim requesting specific information about such acts or omissions.

Pollution liability coverage extension endorsement

Commercial general liability endorsement that provides coverage for BI and PD claims arising out of pollution losses; excludes coverage for pollution clean-up costs.

Pollution liability coverage form

CGL coverage form that provides certain pollution coverages that are excluded under the standard CGL; includes coverage for pollution clean-up costs.

Pollution liability-limited coverage form

CGL coverage form that provides certain pollution coverages that are excluded under the standard CGL; does not include coverage for pollution clean-up costs.

Pool

A group of organizations that band together to insure each other’s loss exposures.