sampraxi/business-glossary · Datasets at Hugging Face

Term stringlengths 4 179	Definition stringlengths 17 599 ⌀
Position schedule bond	Fidelity bond that covers specifically named positions in the company, rather than the individuals who hold these positions.
Post-judgment interest	Interest accruing on a judgment after an award has been made, but before payment is made by the insurance company; usually covered as a supplementary payment in liability policies.
Post-loss goals	Risk management program goals that should be in place in the event of a significant loss.
Pre-construction duties	Development and approval of the new building plans; advertising for, interviewing and selecting a general contractor; applying for and waiting on building permits; and scheduling and completing site clearance work.
Pre-loss goals	Goals to be accomplished before a loss, involving social responsibility, externally imposed goals, reduction of anxiety and economy.
Pre-loss operational income	The ability to generate revenues at the same level enjoyed prior to the suspension of operations.
Prejudgment interest	Interest awarded to compensate a third party for interest he might have earned if compensation had been received at the time of injury or damage, rather than at the time of judgment.
Premature death	Death prior to or during the individual’s income producing or household contribution years.
Premises and operations	Business liability exposure arising out of the business location or the activities of the business; covered under the CGL.
Premium audit	Survey of the insured’s financial records to gather information used to calculate the premium, such as exposures and limits.
Primary insurance	When two or more coverages or policies apply to the same loss, the one that pays first, up to its limit of liability or the amount of the loss, whichever is less.
Primary layer	The first level of insurance coverage above any deductible.
Principal	In bonds, the party who promises to do or not do a specific thing; in agency law, the person or company being represented.
Principal of indemnity	The principle that insurance policies should provide a benefit no greater than the loss suffered by an insured.
Prior approval	Method of rate and form ratification used by some state insurance departments that requires a company to obtain official approval before using new forms or rates.
Pro rata other insurance	Method of handling insurance when more than one coverage applies to a loss; each coverage pays a portion of the loss in proportion to the relationship its limit of liability bears to the total limit of liability under all applicable insurance; also called contribution by limits.
Pro rata reinsurance	The primary insurer cedes a predetermined percentage of the risk to the reinsurer. The reinsurer shares in the losses proportional to the premiums and limits reinsured.
Probability	The likelihood that an outcome or event will occur.
Probability analysis	A technique for forecasting events on the assumption that they are governed by an unchanging probability distribution.
Probability distribution	A presentation of probability estimates of a particular set of circumstances and of the probability of each possible outcome.
Producer	General term used to describe someone who sells insurance, such as an agent, broker, or solicitor.
Production-related expenses	Cost of goods sold (COGS); outside services resold; utility services that do not continue under contract; ordinary payroll; and special deductions for mining operations.
Products and completed operations	Business liability exposure arising out of defects in the company’s products or completed operations; covered by the CGL.
Products liability	Defective product design or manufacture which results in an injury makes the manufacturer strictly liable.
Professional liability	Liability arising out of rendering or failing to render services of a professional nature.
Professional liability policy	Insurance coverage issued to a professional that covers the rendering or failing to render services of a professional nature; policies are tailored to fit specific occupational needs.
Proof of loss	Form completed by an insured after a loss that provides an official inventory of damages.
Property damage (PD)	Damage to or destruction of property, including loss of use of the property.
Property insurance	Line of insurance that includes many types of coverages designed to handle the risk that a person will suffer financial loss because something she owns is damaged or destroyed.
Property loss exposure	A condition that presents the possibility that a person or an organization will sustain a loss resulting from damage to a property in which the have a financial interest.
Property risks	Uncertainty surrounding real property, personal property, and intellectual property.
Protected cell company (PCC)	A corporate entity separated into cells so that each participating company owns an entire cell but only a portion of the overall company.
Protection and indemnity	Form of ocean marine liability insurance that covers a variety of types of liability, such as damage to cargo through negligence and damage to other property or another boat resulting from collision.
Protective safeguards endorsement	Businessowners policy endorsement that requires the insured to maintain fire or security service on specified property as a condition of the policy.
Proximate cause	An action that, in a natural and continuous sequence, produces a loss.
Public official bonds	Type of surety bond furnished by principals who are elected or appointed to fill positions of trust that guarantee their faithful and honest performance in office.
Punitive damages	Type of damages intended to punish the defendant and make an example out of her to discourage others from behaving the same way; also called exemplary damages.
Pure risk	A risk in which there is no chance of gain, only loss.
Putative employer	The special employer rather than the direct employer. Status as the “employer of record” at such a specific time is “put” upon the individual or entity based on several factors, the most obvious is the amount of control the person/entity has over the worker.
Qui Tam	Allowed by the Federal Civil False Claims Act (31 U.S.C. Section 3729 et seq), a qui tam is a suit brought by a private citizen in the name of and on behalf of the United States. Such suits are usually based on charges of fraud committed by government contractors or others who use or receive governmental funds.
Quotation	A summary of coverages and premiums proposed by an agent to a prospective client.
Rate	The basic charge an insurance company sets for various types of insurance.
Real property	Land and everything attached to the land including anything permanently attached to the structure attached to the land such that it cannot be removed from the structure without causing major damage.
Reasonable expectations doctrine	A legal doctrine that provides for an ambiguous insurance policy clause to be interpreted in the way that an insured would reasonably expect.
Reasonable person rule	Principle of law that states that each person must behave like a prudent person following those ordinary considerations that guide human affairs.
Rebating	Giving or offering some benefit other than those specified in the policy to induce a customer to buy insurance; rebating is illegal in most states.
Recipient location	A dependent property location that buys/accepts the products, goods or services of the insured.
Reciprocal company	An unincorporated group of members that share insurance responsibilities with other members; it is managed by an attorney-in-fact.
Redlining	Takes the concept of having an adequate spread of risk to an illegal extreme. It is literally drawing redlines around specific areas on a map and refusing to provide coverage to any person or business within the delineated areas.
Regulatory Risks	Uncertainty surrounding how individuals and organizations are governed by local, state, and federal authorities.
Reinsurance	Acceptance by an insurer, called a reinsurer, of all or part of the risk of loss of another insurer.
Rent-a-captive	An arrangement under which an organization rents capital from a captive to which it pays premiums and receives reimbursement for its losses.
Repair cost	The cost to repair a damaged or destroyed item of property. May be the basis of reimbursement for a loss.
Replacement cost	The cost to replace a damaged or destroyed item of property without deduction for depreciation; may be the basis of reimbursement for some losses.
Reporting policy	Type of policy that does not charge a flat premium; the insured pays a deposit premium, then submits periodic reports to the insurer showing the status of the factors on which the premium is based; from these status reports, premiums are calculated and charged against the deposit.
Representation	Statements on an insurance application that the applicant believes are true; a representation is not considered a matter to which the parties contract, so a policy cannot be voided on the basis of a representation.
Res ipsa loquitur	Latin meaning: The thing speaks for itself. A concept applied in strict liability torts. The only thing necessary to prove legal liability is an injury. Only applies to certain causes of injury.
Residual market insurance	Insurance that is not ordinarily available from private insurers and may be provided by the government; examples include flood insurance, which is provided by the federal government, and workers’ compensation benefits, which may be provided by state funds.
Retention	A risk financing technique by which losses are retained by generating funds within the organization to pay losses.
Retention limit	In an umbrella policy, the amount the insured must pay for a loss that is not covered by an underlying policy before the umbrella will begin to cover the loss; also called the self-insured retention.
Retroactive date	Under the claims-made CGL form, a date stipulated in the declarations as the first date on which an event may occur and be covered by the policy if a claim is filed.
Retrospective rating	Type of merit rating that bases the insured’s premium on losses incurred during the policy period.
Risk	The chance or uncertainty of loss.
Risk control	Risk Control is establishing a plan to reduce the possibility of a loss occurring, or to lessen the effect if one does occur.
Risk financing	Risk Financing is developing and planning for a source of financing necessary to cover the consequences of any loss.
Risk management	Planning for, organizing against, leading others in, and controlling the uncertainty surrounding an outcome arising out of the lack of knowledge regarding future events.
Risk management process	A seven-step process: 1) Determine the objectives of the risk management plan; 2) Identify the risks faced by the organization; 3) Evaluate the risks. 4) Consider/analyze the alternative methods for handling each risk. 5) Select the best risk management methods from among the alternatives. 6) Implement the decision. 7) Continuously monitor the decisions and overall program.
Risk retention group	Insurance company formed by several organizations to cover those organizations’ liability loss exposures; risk retention groups are exempt from most state laws that govern insurance companies.
Risk source -Element which alone or in combination has the intrinsic potential to give rise to risk.	null
Risk’s irony	Without risk there is no reward; and often, the higher the risk, the greater the reward.
Robbery -In crime insurance, the taking or attempted taking of property by one who has caused or threatened to cause bodily harm, or committed a witnessed, obviously unlawful act.	null
Rolling total	Relates to pure extra expense coverage provided in the CP 00 50 (Extra Expense Coverage Form). The insured chooses a rolling total payout percentage, meaning that the insured has access to progressively higher percentages of the total limit during each 30 day period.
Running down clause	Provision found in ocean marine hull policies that provides protection if the ship owner is held liable for the negligent operation of the vessel in damaging another ship.
Salvage	Damaged property that can be retrieved, reconditioned, and sold to reduce an insured loss.
Schedule rating	Type of merit rating that applies a system of debits or credits to reflect characteristics of a particular insured.
Scheduled coverage	Property that is specifically listed in the declarations and covered for a specific amount; also called specific insurance.
Scheduled personal property endorsement	Homeowners policy endorsement that provides open peril, scheduled coverage for nine optional classes of property.
Scope of employment	Analyzes the motivations of the employee, the employer’s direction and control over the actions of the employee; and the employer’s foresee ability of the activities of the employee. Employee actions which ultimately lead to an accident or injury must be motivated, in whole or in part, by the ‘desire’ to further the interests of the employer. Motivation or desire can be out of fear that failure to perform will result in the loss of a job, or from a more altruistic desire to do well for the employer.
Segregation	A loss reduction method to control the amount of loss. Two types of segregation: 1) segregation by separation; and 2) segregation by duplication.
Self-contained policy	A single document that contains all the agreements between the insured and the insurer and that forms a complete insurance policy.
Self-insurance	Alternative to purchasing insurance where a company or individual assumes the risk of paying for its losses and sets aside the necessary funds to pay for such losses.
Self-insured retention (SIR)	A dollar amount specified in an insurance policy that the insured must pay before the insurer will make any payment for a claim.
Separation	A risk control technique that isolates loss exposures from one another to minimize the adverse effect of a single loss.
Service bureau	Organization that gathers, pools, and analyzes statistics from its member insurance companies to establish loss costs used to determine insurance rates.
Severity	The financial consequences of the undesired event.
Shear walls	A shear wall is a structural support running parallel (as nearly as possible) to the flow of the water. These walls are not structurally joined at the ends allowing rushing water to flow through unimpeded.
Significant contact test	This test is applied when making jurisdictional decisions
Signs coverage form	Filed commercial inland marine form that insures businesses against loss to neon, fluorescent, automatic, or mechanical electric signs and lights.
Single limit	One policy limit that applies to both BI and PD losses; may also be called a combined single limit.
Situs	The first test before an employee can be considered a longshoreman or harbor worker. Situs requires that the employment be on, above or below navigable waters and adjoining areas.
SLAPP	A “Strategic Lawsuit Against Public Participation” (SLAPP) is an assault using the legal system as the weapon of choice. Individuals, corporations and governments file SLAPP suits packaged to look like civil suits alleging defamation, invasion of privacy, nuisance, malicious prosecution and other personal injury charges intended solely to embezzle the “offender’s” time and finances by means of legal wrangling and continually mounting legal costs.
Solicitor	Insurance professional who sells insurance and collects premiums but cannot issue or countersign policies.
Special damages	Type of compensatory damages that reimburse the injured party for direct and specific expenses involved in the loss, such as medical expenses and lost wages.
Special flood hazard areas (SFHA)	A special flood hazard area is a specifically defined area that has a 1 percent chance of being inundated by flood waters in any given year (thus the creation of the term “100-year flood plain”). Flood waters have an equal chance of submerging these areas every year for five straight years, or not for 200 years; there is simply a 1 percent statistical possibility every year. Homes located in special flood hazard areas have a 26 percent chance of suffering flood damage over the normal 30-year life of a loan according to FEMA. There are two broad classifications of special
Specific rates	Rates that are somewhat individual in nature and are based on the characteristic of the individual risk exposure. Four types of specific rates: 1) Schedule rating; 2) Experience rating; 3) Retrospective rating; and 4) Judgment rating.
Specified Causes of Loss	One of the physical damage coverage options in the commercial auto coverage forms; provides more limited coverage than comprehensive coverage, insuring only against specified perils such as fire, flood, or explosion.
Speculative risk	A risk that may result in a loss or gain.
Split limits	Policy limit that provides separate limits for BI and PD.
Spoilage endorsement	Endorsement used with the building and personal property and condominium commercial unit-owners commercial property coverage forms; it adds coverage for the insured’s perishable stock-personal property that must be maintained under controlled conditions to protect it from loss or damage.
Spread of risk	Principle of insurance that states that insurers should spread their insured risks over a large geographical area, rather than insuring a large number of people in a small area.

Position schedule bond

Fidelity bond that covers specifically named positions in the company, rather than the individuals who hold these positions.

Post-judgment interest

Interest accruing on a judgment after an award has been made, but before payment is made by the insurance company; usually covered as a supplementary payment in liability policies.

Post-loss goals

Risk management program goals that should be in place in the event of a significant loss.

Pre-construction duties

Development and approval of the new building plans; advertising for, interviewing and selecting a general contractor; applying for and waiting on building permits; and scheduling and completing site clearance work.

Pre-loss goals

Goals to be accomplished before a loss, involving social responsibility, externally imposed goals, reduction of anxiety and economy.

Pre-loss operational income

The ability to generate revenues at the same level enjoyed prior to the suspension of operations.

Prejudgment interest

Interest awarded to compensate a third party for interest he might have earned if compensation had been received at the time of injury or damage, rather than at the time of judgment.

Premature death

Death prior to or during the individual’s income producing or household contribution years.

Premises and operations

Business liability exposure arising out of the business location or the activities of the business; covered under the CGL.

Premium audit

Survey of the insured’s financial records to gather information used to calculate the premium, such as exposures and limits.

Primary insurance

When two or more coverages or policies apply to the same loss, the one that pays first, up to its limit of liability or the amount of the loss, whichever is less.

Primary layer

The first level of insurance coverage above any deductible.

Principal

In bonds, the party who promises to do or not do a specific thing; in agency law, the person or company being represented.

Principal of indemnity

The principle that insurance policies should provide a benefit no greater than the loss suffered by an insured.

Prior approval

Method of rate and form ratification used by some state insurance departments that requires a company to obtain official approval before using new forms or rates.

Pro rata other insurance

Method of handling insurance when more than one coverage applies to a loss; each coverage pays a portion of the loss in proportion to the relationship its limit of liability bears to the total limit of liability under all applicable insurance; also called contribution by limits.

Pro rata reinsurance

The primary insurer cedes a predetermined percentage of the risk to the reinsurer. The reinsurer shares in the losses proportional to the premiums and limits reinsured.

Probability

The likelihood that an outcome or event will occur.

Probability analysis

A technique for forecasting events on the assumption that they are governed by an unchanging probability distribution.

Probability distribution

A presentation of probability estimates of a particular set of circumstances and of the probability of each possible outcome.

Producer

General term used to describe someone who sells insurance, such as an agent, broker, or solicitor.

Production-related expenses

Cost of goods sold (COGS); outside services resold; utility services that do not continue under contract; ordinary payroll; and special deductions for mining operations.

Products and completed operations

Business liability exposure arising out of defects in the company’s products or completed operations; covered by the CGL.

Products liability

Defective product design or manufacture which results in an injury makes the manufacturer strictly liable.

Professional liability

Liability arising out of rendering or failing to render services of a professional nature.

Professional liability policy

Insurance coverage issued to a professional that covers the rendering or failing to render services of a professional nature; policies are tailored to fit specific occupational needs.

Proof of loss

Form completed by an insured after a loss that provides an official inventory of damages.

Property damage (PD)

Damage to or destruction of property, including loss of use of the property.

Property insurance

Line of insurance that includes many types of coverages designed to handle the risk that a person will suffer financial loss because something she owns is damaged or destroyed.

Property loss exposure

A condition that presents the possibility that a person or an organization will sustain a loss resulting from damage to a property in which the have a financial interest.

Property risks

Uncertainty surrounding real property, personal property, and intellectual property.

Protected cell company (PCC)

A corporate entity separated into cells so that each participating company owns an entire cell but only a portion of the overall company.

Protection and indemnity

Form of ocean marine liability insurance that covers a variety of types of liability, such as damage to cargo through negligence and damage to other property or another boat resulting from collision.

Protective safeguards endorsement

Businessowners policy endorsement that requires the insured to maintain fire or security service on specified property as a condition of the policy.

Proximate cause

An action that, in a natural and continuous sequence, produces a loss.

Public official bonds

Type of surety bond furnished by principals who are elected or appointed to fill positions of trust that guarantee their faithful and honest performance in office.

Punitive damages

Type of damages intended to punish the defendant and make an example out of her to discourage others from behaving the same way; also called exemplary damages.

Pure risk

A risk in which there is no chance of gain, only loss.

Putative employer

The special employer rather than the direct employer. Status as the “employer of record” at such a specific time is “put” upon the individual or entity based on several factors, the most obvious is the amount of control the person/entity has over the worker.

Qui Tam

Allowed by the Federal Civil False Claims Act (31 U.S.C. Section 3729 et seq), a qui tam is a suit brought by a private citizen in the name of and on behalf of the United States. Such suits are usually based on charges of fraud committed by government contractors or others who use or receive governmental funds.

Quotation

A summary of coverages and premiums proposed by an agent to a prospective client.

Rate

The basic charge an insurance company sets for various types of insurance.

Real property

Land and everything attached to the land including anything permanently attached to the structure attached to the land such that it cannot be removed from the structure without causing major damage.

Reasonable expectations doctrine

A legal doctrine that provides for an ambiguous insurance policy clause to be interpreted in the way that an insured would reasonably expect.

Reasonable person rule

Principle of law that states that each person must behave like a prudent person following those ordinary considerations that guide human affairs.

Rebating

Giving or offering some benefit other than those specified in the policy to induce a customer to buy insurance; rebating is illegal in most states.

Recipient location

A dependent property location that buys/accepts the products, goods or services of the insured.

Reciprocal company

An unincorporated group of members that share insurance responsibilities with other members; it is managed by an attorney-in-fact.

Redlining

Takes the concept of having an adequate spread of risk to an illegal extreme. It is literally drawing redlines around specific areas on a map and refusing to provide coverage to any person or business within the delineated areas.

Regulatory Risks

Uncertainty surrounding how individuals and organizations are governed by local, state, and federal authorities.

Reinsurance

Acceptance by an insurer, called a reinsurer, of all or part of the risk of loss of another insurer.

Rent-a-captive

An arrangement under which an organization rents capital from a captive to which it pays premiums and receives reimbursement for its losses.

Repair cost

The cost to repair a damaged or destroyed item of property. May be the basis of reimbursement for a loss.

Replacement cost

The cost to replace a damaged or destroyed item of property without deduction for depreciation; may be the basis of reimbursement for some losses.

Reporting policy

Type of policy that does not charge a flat premium; the insured pays a deposit premium, then submits periodic reports to the insurer showing the status of the factors on which the premium is based; from these status reports, premiums are calculated and charged against the deposit.

Representation

Statements on an insurance application that the applicant believes are true; a representation is not considered a matter to which the parties contract, so a policy cannot be voided on the basis of a representation.

Res ipsa loquitur

Latin meaning: The thing speaks for itself. A concept applied in strict liability torts. The only thing necessary to prove legal liability is an injury. Only applies to certain causes of injury.

Residual market insurance

Insurance that is not ordinarily available from private insurers and may be provided by the government; examples include flood insurance, which is provided by the federal government, and workers’ compensation benefits, which may be provided by state funds.

Retention

A risk financing technique by which losses are retained by generating funds within the organization to pay losses.

Retention limit

In an umbrella policy, the amount the insured must pay for a loss that is not covered by an underlying policy before the umbrella will begin to cover the loss; also called the self-insured retention.

Retroactive date

Under the claims-made CGL form, a date stipulated in the declarations as the first date on which an event may occur and be covered by the policy if a claim is filed.

Retrospective rating

Type of merit rating that bases the insured’s premium on losses incurred during the policy period.

Risk

The chance or uncertainty of loss.

Risk control

Risk Control is establishing a plan to reduce the possibility of a loss occurring, or to lessen the effect if one does occur.

Risk financing

Risk Financing is developing and planning for a source of financing necessary to cover the consequences of any loss.

Risk management

Planning for, organizing against, leading others in, and controlling the uncertainty surrounding an outcome arising out of the lack of knowledge regarding future events.

Risk management process

A seven-step process: 1) Determine the objectives of the risk management plan; 2) Identify the risks faced by the organization; 3) Evaluate the risks. 4) Consider/analyze the alternative methods for handling each risk. 5) Select the best risk management methods from among the alternatives. 6) Implement the decision. 7) Continuously monitor the decisions and overall program.

Risk retention group

Insurance company formed by several organizations to cover those organizations’ liability loss exposures; risk retention groups are exempt from most state laws that govern insurance companies.

Risk source -Element which alone or in combination has the intrinsic potential to give rise to risk.

null

Risk’s irony

Without risk there is no reward; and often, the higher the risk, the greater the reward.

Robbery -In crime insurance, the taking or attempted taking of property by one who has caused or threatened to cause bodily harm, or committed a witnessed, obviously unlawful act.

null

Rolling total

Relates to pure extra expense coverage provided in the CP 00 50 (Extra Expense Coverage Form). The insured chooses a rolling total payout percentage, meaning that the insured has access to progressively higher percentages of the total limit during each 30 day period.

Running down clause

Provision found in ocean marine hull policies that provides protection if the ship owner is held liable for the negligent operation of the vessel in damaging another ship.

Salvage

Damaged property that can be retrieved, reconditioned, and sold to reduce an insured loss.

Schedule rating

Type of merit rating that applies a system of debits or credits to reflect characteristics of a particular insured.

Scheduled coverage

Property that is specifically listed in the declarations and covered for a specific amount; also called specific insurance.

Scheduled personal property endorsement

Homeowners policy endorsement that provides open peril, scheduled coverage for nine optional classes of property.

Scope of employment

Analyzes the motivations of the employee, the employer’s direction and control over the actions of the employee; and the employer’s foresee ability of the activities of the employee. Employee actions which ultimately lead to an accident or injury must be motivated, in whole or in part, by the ‘desire’ to further the interests of the employer. Motivation or desire can be out of fear that failure to perform will result in the loss of a job, or from a more altruistic desire to do well for the employer.

Segregation

A loss reduction method to control the amount of loss. Two types of segregation: 1) segregation by separation; and 2) segregation by duplication.

Self-contained policy

A single document that contains all the agreements between the insured and the insurer and that forms a complete insurance policy.

Self-insurance

Alternative to purchasing insurance where a company or individual assumes the risk of paying for its losses and sets aside the necessary funds to pay for such losses.

Self-insured retention (SIR)

A dollar amount specified in an insurance policy that the insured must pay before the insurer will make any payment for a claim.

Separation

A risk control technique that isolates loss exposures from one another to minimize the adverse effect of a single loss.

Service bureau

Organization that gathers, pools, and analyzes statistics from its member insurance companies to establish loss costs used to determine insurance rates.

Severity

The financial consequences of the undesired event.

Shear walls

A shear wall is a structural support running parallel (as nearly as possible) to the flow of the water. These walls are not structurally joined at the ends allowing rushing water to flow through unimpeded.

Significant contact test

This test is applied when making jurisdictional decisions

Signs coverage form

Filed commercial inland marine form that insures businesses against loss to neon, fluorescent, automatic, or mechanical electric signs and lights.

Single limit

One policy limit that applies to both BI and PD losses; may also be called a combined single limit.

Situs

The first test before an employee can be considered a longshoreman or harbor worker. Situs requires that the employment be on, above or below navigable waters and adjoining areas.

SLAPP

A “Strategic Lawsuit Against Public Participation” (SLAPP) is an assault using the legal system as the weapon of choice. Individuals, corporations and governments file SLAPP suits packaged to look like civil suits alleging defamation, invasion of privacy, nuisance, malicious prosecution and other personal injury charges intended solely to embezzle the “offender’s” time and finances by means of legal wrangling and continually mounting legal costs.

Solicitor

Insurance professional who sells insurance and collects premiums but cannot issue or countersign policies.

Special damages

Type of compensatory damages that reimburse the injured party for direct and specific expenses involved in the loss, such as medical expenses and lost wages.

Special flood hazard areas (SFHA)

A special flood hazard area is a specifically defined area that has a 1 percent chance of being inundated by flood waters in any given year (thus the creation of the term “100-year flood plain”). Flood waters have an equal chance of submerging these areas every year for five straight years, or not for 200 years; there is simply a 1 percent statistical possibility every year. Homes located in special flood hazard areas have a 26 percent chance of suffering flood damage over the normal 30-year life of a loan according to FEMA. There are two broad classifications of special

Specific rates

Rates that are somewhat individual in nature and are based on the characteristic of the individual risk exposure. Four types of specific rates: 1) Schedule rating; 2) Experience rating; 3) Retrospective rating; and 4) Judgment rating.

Specified Causes of Loss

One of the physical damage coverage options in the commercial auto coverage forms; provides more limited coverage than comprehensive coverage, insuring only against specified perils such as fire, flood, or explosion.

Speculative risk

A risk that may result in a loss or gain.

Split limits

Policy limit that provides separate limits for BI and PD.

Spoilage endorsement

Endorsement used with the building and personal property and condominium commercial unit-owners commercial property coverage forms; it adds coverage for the insured’s perishable stock-personal property that must be maintained under controlled conditions to protect it from loss or damage.

Spread of risk

Principle of insurance that states that insurers should spread their insured risks over a large geographical area, rather than insuring a large number of people in a small area.