-D-

Damages - Monetary compensation awarded by a court to an injured party.

Declarations - Section of an insurance contract that shows who is insured, what property or risk is covered, when and where the coverage is effective, and how much coverage applies.

Deductible - Dollar amount the insured must pay on each loss to which the deductible applies. The insurance company pays the remainder of each covered loss, up to the policy limits.

Definitions - Section of an insurance policy that clarifies the meaning of certain terms used in the policy.

Deposit Premium - Premium paid at the beginning of the policy period that is based on an estimate of what the final premium will be. This premium is adjusted based on reports submitted by the insured to the insurer. Also called an estimated premium.

Direct Loss - Financial loss resulting directly from a loss to property.

Direct Response System - Insurance company that sells insurance through the mail or over the phone. No agents are involved.

Direct Writer - Insurance marketing system where the company’s agents are also employees of the company.

Directors and Officers Liability Insurance (D&O) - Type of Errors and Omissions policy written for directors and officers of corporations who may be sued as individuals by stockholders.

Doctrine of Reasonable Expectations - Legal principle that provides that an insurance policy includes coverages that an average person would reasonably expect it to include, regardless of what the policy actually provides.

Domestic Company - Insurance company doing business in the state in which it is incorporated.

Duties Following Loss - Condition found in property-casualty policies that explains the insured’s responsibilities after a loss occurs.

Dwelling Policy - Policy that provides Property coverage to individuals and families. Covers dwellings, other structures, personal property, and fair rental value. Some versions also cover additional living expense. The unendorsed policy does not provide Liability coverage.

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Earthquake Insurance - Insurance that covers damage to a structure, its contents or both as the result of an earthquake. Available as a separate policy, as an endorsement to the Dwelling or Homeowners policy and through the Causes Of Loss — Earthquake form for the Commercial Property coverage part.

Electronic Data Processing Policy - Nonfiled Commercial Inland Marine policy that provides Property coverage for hardware, data and software. Also includes extra expense and business interruption coverage and coverage for liabilty arising out of handling or storing data for other firms.

Employee Dishonesty Coverage Form - Commercial Crime form that covers loss resulting from dishonest acts of employees. This type of loss is excluded under other Crime forms.

Employees As Insureds Endorsement - Commercial Auto endorsement that provides Liability coverage for employees driving their own cars in the course of business.

Employers Liability Coverage - Coverage included in the Workers Compensation And Employers Liability policy that covers the employer’s liability at common law arising out of employee’s work related injuries and occupational diseases.

Endorsement - Document attached to an insurance policy that changes the policy in some way.

Errors And Omissions Insurance (E&O) - Professional Liability coverage that protects the insured against liability for committing an error or omission in the performance of professional duties.

Estimated Premium - See Deposit Premium

Excess Insurance - When two or more policies or coverages apply to the same loss, the one that applies only after the limits of the primary coverage have been exhausted

Excess Lines Agent - Agent licensed by the state to handle the placement of business with nonadmitted insurers. Also called surplus lines agent.

Exclusive Agent - An agent who markets insurance for a single company. Also called captive agent.

Experience Modification Factor - In experience rating, the factor applied to reduce the premium when loss experience is better than expected.

Experience Rating - Type of merit rating that determines premium based on previous loss experience.

Exposure - A condition or situation that presents a possibility of loss.

Extended Coverages - See Additional Coverages.

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Fair Credit Reporting Act - Federal law that allows consumers who are denied insurance because of information contained in a credit report to be notified and allowed to obtain the information used in the report from the reporting agency.

FAIR Plan - Program established by law that makes Property insurance available to insureds who might otherwise be uninsurable in the standard market. Stands for fair access to insurance requirements.

Fidelity Bond - Class of bonds that guarantees an employee’s honest discharge of duty; written to protect an insured from dishonest acts by employees.

Fiduciary - Person who stands in a special relationship of trust to another person.

Fiduciary Bond - Type of Surety bond that guarantees that a fiduciary will fulfill its obligations set forth by law.

Financial Responsibility Laws - State laws that require owners or operators of autos to provide evidence that they have the funds to pay for automobile losses for which they might become liable. Insurance is the usual method for providing this evidence to the state.

First Named Insured - First person listed in the Declarations as an insured. The first named insured may have a higher level of duties or rights under the policy.

First Party Loss - Property insurance loss.

Floater - Insurance policy that covers property wherever it is located.

Flood Insurance - See National Flood Insurance Program.

Foreign Company - An insurance company doing business in a state other than the one in which it is incorporated.

Forgery Or Alteration Coverage Form - Commercial Crime form that covers loss from forgery or alteration of checks, drafts and similar instruments made or drawn by or on the named insured or the insureds agent.

Fraternal Organization - An incorporated society or order, without capital stock, that is operated on the lodge system and is conducted solely for the benefit of its members and their beneficiaries, and not for profit.

Fraternal organizations offer insurance that is available only to members.

Fraud - A deliberate misrepresentation that causes harm; an all-out effort by one party to deceive and cheat the other.

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Garage Coverage Form - Commercial Auto coverage form designed for garage businesses such as dealers, service stations, garages, and parking lots. It includes coverage for liability arising out of auto and garage operations, physical damage and garagekeepers’ losses arising out of owned, non-owned and hired autos.

Garagekeepers Insurance - Coverage that is part of the Garage coverage form. Covers a garage risk’s legal liability for customers’ autos in the care, custody or control of the garage. At the insured’s option and for an additional premium, can also apply without regard to fault.

General Conditions Form - Separate form that lists the conditions that apply to a policy.

General Damages - Type of compensatory damages that reimburse the injured party for such things as pain and suffering and disfigurement.

Glass Coverage Form - Commercial Property coverage form that covers plate glass, lettering and ornamentation.

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Hazard - Something that increases the chance of a loss.

Health Insurance - Line of insurance that protects the insured against financial loss due to medical bills.

Hired and Nonowned Auto Liability Endorsement - Businessowners policy endorsement used to cover hired or nonowned autos used by the business.

Home Day Care Coverage Endorsement - Homeowner’s policy endorsement used to provide coverage for home day care businesses.

Homeowners Policy - Personal multi-line policy for homeowners that includes both Property and Liability coverages. There are six different forms that provide varying degrees of coverage.

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Indemnity - Principle of insurance that provides that when a loss occurs, the insured should be restored to the approximate financial condition he or she occupied before the loss occurred, no better or no worse.

Independent Adjuster - Claim handler who works independently instead of for a particular insurer.

Independent Agent - Agent who represents many insurance companies, rather than a single company. Also called a nonexclusive agent.

Indirect Loss - Loss that is the result or consequence of a direct loss. Also called a consequential loss.

Individual Named Insured Endorsement - Commercial Auto endorsement that provides coverage similar to that provided under the Personal Auto policy to family members of the named insured while using any auto.

Insurable Interest - Any actual, lawful and substantial economic interest in the safety or preservation of the subject of the insurance from loss or destruction or financial damage or impairment.

Insurance - Contract or device for transferring the risk of loss from a person, business or organization to an insurance company that agrees, in exchange for a premium, to pay for losses through an accumulation of premiums.

Insurance Commissioner - Head official of a state insurance department. May also be called an Insurance Director or Insurance Superintendent.

Insurance Department - State department charged with controlling insurance matters within the state.

Insurance Services Office (ISO) - Organization established for the benefit of its member insurance companies and other subscriber companies. ISO gathers statistics, provides loss costs, drafts policy forms and coverage provisions, and conducts inspections for rate-making purposes.