Vocab Chapter 1

Front 1

Loss Exposure

Back 1

Any condition or situation that presents the possibility of a loss.

Front 2

Law of Large Numbers

Back 2

A mathematical principle stating that as the number of similar but independent exposure units increases, the relative accuracy of predictions about future outcomes based on these exposures units also increases

Front 3

Exposure Unit

Back 3

A measure of the loss exposure assumed by the insurer, used in pricing insurance

Front 4

Property Loss Exposure

Back 4

Any condition or situation that presents the possibility that a property loss will happen

Front 5

Real Property

Back 5

Land, building, and other structures attached to the land or embedded in it

Front 6

Personal Property

Back 6

All tangible or intangible property that is not real property

Front 7

Net Income

Back 7

Revenue minus expenses and taxes during a given time period

Front 8

Net Income Loss

Back 8

An indirect loss caused by a reduction in revenue, an increase in expenses, or both during a given time period

Front 9

Liability Loss Exposure

Back 9

Any condition or situation that presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party

Front 10

Liability Loss

Back 10

A claim for monetary damages because of injury to another party or damage to another party's property

Front 11

Personal Loss Exposure

Back 11

Any condition or situation that presents the possibility of a financial loss to an individual or a familyby such causes as death, sickness, injuyr, or unemployment

Front 12

Personnel loss exposure

Back 12

Any condition or situation that presents the possibility of a financial loss to a business because of the death, disability, retirement, or resignation of key employees

Front 13

Indemnify

Back 13

To restore a party who has sustained a loss to the same financial position that party held before the loss ocurred

Front 14

Fire and allied lines insurance

Back 14

Insurance that covers direct damage to or loss of insured property

Front 15

Business income insurance, or business interruption insurance

Back 15

Insurance that covers, the loss of net income or additional expenses incurred by a business as the result of a covered loss to its property

Front 16

Crime Insurance

Back 16

Insurance that covers money, securities, merchandise, and other property from various causes of loss such as burglary, robbery, theft, and employee dishonesty

Front 17

Ocean Marine Insurance

Back 17

Insurance that covers ships and their cargo against such causes of loss as fire, lightning, and "perils of the sea"

Front 18

Inland Marine insurance

Back 18

Insurance that covers miscellaneous types of property, such as movable property, goods, in domestic transit, and property used in transportation and communication

Front 19

Auto physical damage insurance

Back 19

Insurance that covers loss of or damage to specified vehicles from collistion, fire, theft, or other causes

Front 20

Auto Liability insurance

Back 20

insurance that covers an insured's legal liability arising out of the ownership, maintenance, or use of an automobile

Front 21

commercial general
liablility insurance

Back 21

Insurance that covers liability loss exposure arising from a business organization's premises and operations, its products, or its completed work

Front 22

Personal liability insurance

Back 22

Insurance that provides liability coverage to individuals and families for bodily injury and property damage arising from the insured's personal premises or activities

Front 23

Professional liability
insurance

Back 23

Insurance that provides liability coverage to professionals for errors and omissions arising out of their professional duties

Front 24

Whole life insurance

Back 24

Life insurance that provides lifetime protection, accrues cash value, and has premiums that remain unchanged during the insured's lifetime

Front 25

Cash Value

Back 25

The monetary amount, considered to be a form of savings, that accumulates in a whole life insurance policy

Front 26

Term Insurance

Back 26

Life insurance that provides coverage for a specified period, such as 10 or 20 years, with no cash value

Front 27

Universal lif insurance

Back 27

Insurance that provides life insurance protection and a savings component

Front 28

Medical insurance

Back 28

Insurance that covers medical expenses that result from illness or injury

Front 29

Disability income insurance

Back 29

A type of health insurance that provides periodic income payments to an insured who is unable to work because of sickness or injury