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Jettison - A voluntary action to rid a ship of cargo to prevent further damage or peril. Jettison is a covered peril in Ocean marine policies.

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Law Of Large Numbers - Principle that states that the more examples used to develop any statistic, the more reliable the statistic will be.

Legal Purpose - One of the characteristics of a legal contract; means that contracts are only enforceable if they are not obviously illegal, immoral or against the public good.

Liability Insurance - Type of insurance that protects an insured from financial loss arising out of liability claims by transferring the burden of financial loss from the insured to the insurance company.

Liberalization Condition - Condition found in Property insurance contracts that provides that if a law is passed that broadens coverage under a policy form or endorsement without requiring an additional premium, then all existing similar policies or endorsements will be construed to contain the broadened coverage.

Life Insurance - Insurance that pays a stipulated sum to a designated beneficiary upon the death of the insured. Protects the insured’s beneficiary against the financial consequences of the insured’s premature death.

Limit Of Coverage - See Policy Limit

Limit Of Insurance - See Policy Limit

Limit Of Liability - See Policy Limit

Lloyd’s Association - A voluntary association of individuals or groups of individuals who agree to share in insurance contracts. Each individual or "syndicate" is individually responsible for the amounts of insurance they write.

Loss Cost - Factor used in figuring insurance rates that represents how much an insurance company needs to collect to cover expected losses.

Loss Ratio - Method used to determine an insurance company’s success in covering current losses out of current premium income; determined by dividing incurred losses by earned premium.

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Malpractice Insurance - Term used to describe Professional Liability insurance issued to medical professionals or institutions.

Market Value - The amount property could be sold for at the time of loss. May be used to determine the amount of reimbursement for a loss.

Material Fact - A fact that had it been known to the insurer, would have caused the insurer to decline coverage or issue entirely different coverage.

Merit Rating - Method of determining premiums where a manuel rate is modified to reflect the risk’s unique characteristics. See Experience rating, Retrospective Rating and Schedule Rating.

Misrepresentation - Written or verbal misstatement of a material fact involved in the contract on which the insurer relies.

Mobile Equipment Endorsement - Commercial Auto endorsement that makes mobile equipment considered a covered auto for coverage purposes.

Money Orders And Counterfeit Paper Currency Coverage Form - Commercial Crime form that covers loss arising out of the insured’s acceptance of counterfeit money and money orders that are not paid (including counterfeits).

Mono-Line Company - Insurance company that writes a single line of insurance.

Mono-Line Policy - Insurance policy that providing one type of insurance coverage.

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 or her 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.

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.