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Glossary

Act of God: A flood, earthquake, or other act occasioned exclusively by violence of nature that is without any human intervention and that could not have been prevented by reasonable care or foresight.

Actual Loss Sustained: The basis of payment under most Business Interruption policies. The amount of the payment is limited to the actual amount the business would have earned had the loss not occurred.

Actual Cash Value: The fair or reasonable cash price property would bring in a fair market, allowing for depreciation.

Additional Insured: Person(s) covered by the policy in addition to the named insured.

Additional living expenses: A form of coverage which provides funds to pay for increased living costs which result from damage covered by the policy.

Alarm Discount: A discount given for having a specific alarm system monitoring your home.

All Risk: A policy which does not name the perils which are covered but one which covers against all perils except those specifically excluded in its terms.

Assumed Liability: Liability which would not rest upon a person except that he has accepted responsibility by contract expressed or implied. This is also known as Contractual Liability.

Attractive Nuisance Doctrine: A legal tort doctrine which holds that person who has or creates any condition upon his own premises, or who creates such condition on the premises of another, or in a public, place which may reasonably be considered to be a source of danger to children, is under a duty to take such precautions as a reasonably prudent man would take to prevent injury to young children whom he knows visits there or who may come there to play.

Builder’s Risk Insurance: Covers building during construction. Normally includes coverage for all materials entering into project, including landscaping. Coverage for transit exposure and property at another location are usually available as coverage options.

Building Coverage: Pertains to coverage for a structure designed for habitation, shelter, storage, trade, manufacture, religion, business, education, and the like. Usually but not necessarily covered with a roof.

Business Interruption Insurance: Insurance against business expense and loss of income when business is partially or wholly interrupted as a result of damage to property from an insured peril.

By-Laws: Regulations, ordinances, rules or laws dealing with matters of local or internal regulation made by local authorities or by corporations or associations.

Cancellation: Termination of insurance before the end of the policy period by either the insured or the insurer.

Care, Custody & Control: Term used primarily in liability coverages which refers to property belonging to another but which is legally in the insured’s possession or under his control.

Certificate of Insurance: Document evidencing that policy is in effect and includes statement of the coverage in general terms.

Certified Copy: A copy of a document or record which is certified as a true copy by the officer to whose custody the original is entrusted.

Claims-free discount: A discount given if you have not made any insurance claims in a specific period of time.

Co-insurance Clause: A clause in certain property insurance policies which provides for the application a penalty for partial losses when owners of the property fail to insurance, as a minimum, to the percentage of the value of such property as specified by the insurer (e.g. 80, 90 or 100 percent).

Common Area: In common law, the portion of the premises over which the landlord retains control (e.g. Hallways), and hence, for whose conditions he is liable. Also refers to areas in common use by residents of condominium.

Consignment: Goods entrusted to another to sell for the consignor. A bailment for sale.

Constructive Total Loss: Position which exists when the cost of salvaging the lost or damaged property is too high relative to the value saved. In such instances, the property has lost its total usefulness so as to render it valueless to the insured.

Contents: All property belonging to the insured, other than real property.

Contingent Liability: A liability not yet fixed but dependent on events to occur in the future (e.g. a pending law suit).

Contributory Negligence: Conduct by plaintiff which is a contributing cause which co-operates with the defendant’s negligence in causing the plaintiff’s harm.

Course of Employment: In the doctrine that an employer is liable for the torts of his employee done “in the course of his employment”, this term means while engaged in the service of the employer and performing the employer’s work, as distinct from the employee’s acts not connected with his employer’s business.

Cover Note: Written statement by insurance agent or broker that coverage is in effect. Different from binder, in that a binder is prepared by the company.

Cross Liability: Means “the insurance provided under the policy applies separately to each person insured.”

Customers’ Goods: Goods belonging to insured’s customers in his custody as a bailee for the purpose of his trade.

Decline: The refusal of the insurance company to accept an application for insurance.

Deductible: The specific dollar amount or percentage of the insured value to be borne by the insured before he is entitled to recovery from the insurer.

Depreciation: The amount of decrease in the value of property over a period of time due to use, wear, tear and obsolescence.

Detached: Not joined to another structure on either side.

Diligence: Attentive and persistent in doing something.

Due Diligence: Measure of prudence as is to be expected from a reasonable and prudent person under the particular circumstances, i.e., not measured in accordance with any absolute standard but depending on the relative facts of the special case.

Directors and Officers Liability Insurance: Protection for officers and directors of a corporation against damages resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation for expenses in defending lawsuits arising from such acts.

Discovery Period: The time permitted by the insurer, commencing with the expiry date of the policy in which a claim must be discovered by the insured if it is to be covered by the policy.

Doctrine of Negligence: Rests on duty of every person to exercise due care in his conduct toward others from which injury may result.

Duty: A legal or moral obligation to do a thing.

Duty to Act: Obligation to take action to prevent harm to another and for failure of which there may or may not be liability in tort.

Effective Date: The date an insurance policy comes into effect or the date additional coverages come into force.

Employee Dishonesty: In insurance, generally refers to losses resulting directly from one or more fraudulent or dishonest acts committed by an employee, acting alone or in collusion with others.

Employer’s Liability Insurance: Coverage against common law liability of an employer for accidents to employees, as distinguished from liability imposed by a Worker’s Compensation Law.

Endorsement: A piece of paper issued by the insurer indicating in writing that there has been a change in the terms or conditions of the insured’s policy.

Errors and Omissions Insurance: Insurance covering legal liabilities of professionals not usually involved in care of the human body (e.g. Insurance brokers, accountants, etc). Indemnifies insured for any loss sustained because of the rendering or failure to render professional services.

Exclusion: Provision specifying the situations, occurrences or persons not covered by the policy.

Fair Market Value: Price at which property would change hands between a willing buy and a willing seller, if neither were under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. Synonymous with actual value, market value, fair cash value, reasonable market value, trust cash value, value.

Fidelity Bond: Contract whereby one agrees to indemnify the insured against loss arising from dishonesty of employee or other person holding a position of trust.

Fidelity Insurance: Covers losses caused by dishonesty or want of fidelity on part of insured’s employees.

Fiduciary: One who manages money or property for another and who must exercise a standard of care imposed by law or contract.

Fire Resistant: Term generally applied to buildings which have met minimum standards in terms of the hours they will withstand a specific carefully controlled test fire.

Flat Rate: Fixed rate which will not be adjusted.

Floater Policy: Policy which covers items that have no fixed locations. For example: jewellery or other items of personal property worn or carried about by the insured.

Forcible Entry: One is guilty of forcible entry who either (a) enters a building by breaking open doors, windows, or other parts of a building, or enters using violence or terror; or (b) who, once entering a building, turns out by force, threats, or menacing conduct the party in possession.

Fortuitous Event: An event that happens by accident.

Fraud: An act of wilful deception and dishonesty carried out with a view to securing some advantage, profit, etc, to which one is not entitled, at the expense of another.

Gross Negligence: The deliberate or intentional failure to perform a clear duty in reckless disregard of the consequences on the life or property of another.

Guaranteed replacement cost: The cost of replacing, repairing, constructing or reconstructing, whichever is the least, the property on the same site with new property of like kind and quality and for like occupancy without deduction for depreciation. Under this provision, coverage is in place even if the replacement cost exceeds the insured value.

Hazard: The risk, danger, or probability that the event insured against may happen.

Hold Harmless Agreement: A contractual agreement whereby one party assumes legal responsibility for the acts of another.

Holding Company: A company whose main activity is to own a controlling interest in the shares of other corporations and to supervise the management of such other companies.

Improvements and Betterments: Additions or changes to rented premises by a tenant at his/her own expense. Also called Tenant’s Improvements.

Indemnify: To compensate the victim of a loss, in whole or in part, by payment, repair, or replacement.

Indemnity: Express or implied contract in which liability for a loss is shifted from one person held legally responsible to another person.

Identity Fraud: The act of acquiring key pieces of any insured persons identifying information and knowingly transferring or using that information, without lawful authority, with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of any federal, provincial, territorial, municipal or quasi-criminal law.

Independent Adjuster: A person, firm or corporation who adjusts losses on behalf of insurance companies, but is not a regular employee of the company, does not work exclusively for one company and is paid in each case assigned for time consumed and expenses incurred.

In Force: Policy which has not expelled or been cancelled.

Injury: Damage or wrong done to a person, his rights, reputation or property.

Inspection Report: Report prepared after a physical inspection of the risk which provides a detailed description of premises or property to be insured, including the hazards involved.

Insurance: A contract (policy) whereby, for monetary consideration (premium), one party (the insurer) undertakes to compensate the other (the insured) for loss on a specified subject by specified perils.

Insurance to Value: Insuring the full value of property, or at least to that value that meets the coinsurance requirement.

Insured: The person or corporation whose insurable interest is protected by the policy, not limited to the insured named in the policy, but applies to anyone who is insured under the policy.

Jewellery Option: All risk coverage designed for scheduled jewellery wherever it may be.

Joint and Several Liability: It is the creditor’s option to sue one of several debtors individually, or any of them, or all of them. Also applies to law of torts. If more than one commits a tor and injures another person, the group of tort-feasors would be jointly and severally liable for the damage. The injured person can elect to sue one, any, or all of them.

Key Man Insurance: Protects companies against financial loss on the death or disability of a valued employee, or by partnership to provide funds with which to buy out the interest of such partner on his death or disability.

Lead Company: Normally, the insurer accepting the largest share of a risk on a subscription policy.

Lease: An agreement which gives rise to relationship of landlord and tenant (real property) or lessor and lessee (real or personal property). The party who conveys is called the “lessor,” and the party to whom conveyed, the “lessee.”

Legal Liability: Liability which courts recognize and enforce on individuals or corporations to pay for harm done to others.

Legally Liable: Liability imposed by law or liability which law fixes by contract.

Lessee: One who rents property from another under a lease, e.g. a tenant.

Lessor: One who rents property to another under a lease, e.g. a landlord.

Letter of Credit: Method of payment between buyer and seller. A negotiable instrument in form of a letter which requests person or bank to advance money or credit to a third person. The person or bank giving the letter agrees to repay the person or bank making the advancement so long as it complies with the conditions specified in the credit.

Libel: Written defamation expressed by print, writing, pictures, or signs.

License Bond: Required by government authority as a pre-condition to the granting of a licence. Guarantees payment to oblige for loss or damage resulting from licensee’s failure to conduct business in compliance with regulations pertaining to it and for violations of the duties and obligations imposed upon him.

Lien: A claim or charge on real or personal property for payment of some debt, duty, or obligation.

Like Kind and Quality: Clause found in property insurance policies which limits the liability of the insurer for property lost or damaged to property of “like kind and quality”.

Limited Partner: One whose liability to third party creditors is limited to the amount he has invested in the partnership.

Line: Term used to refer to types of policies or exposures making up an account or class of business written by an insurer.

Lloyd’s of London: An insurance market in London where individual underwriters gather for the purpose of transacting insurance.

Loss: In insurance, the reduction in value of a property occasioned by a peril against which insurance is granted. Also, a state of fact of being lost, ruined or destroyed.

Loss Exposure: As relates to risk management, the chance of financial loss to the organization as the result of a particular peril striking a thing of value.

Loss Payee: Person named in insurance policy who will be paid in event of loss.

Maintenance Bond: Contract bond guaranteeing that obligations imposed by law and in contract upon the principal for repair or replacement of defective work and materials will be fulfilled for a stipulated period of time after completion of a job.

Malicious Act: An unlawful act intentionally done to injure another.

Malpractice: Failure of a person who renders professional services to exercise the degree of skill and learning commonly applied by a professional person, with resultant injury, loss or damage.

Malpractice Insurance: Insurance covering legal liability of certain professionals, e.g., medical practitioners, dentists, pharmacists, for loss sustained because of the rendering or failure to render professional services.

Manuscript Wording: In insurance, a policy form or wording which does not conform to standard wordings in general use and which is often unique to the risk being undertaken. Usually developed by the broker.

Market Price: The price at which a seller is ready and willing to sell and a buyer ready and willing to buy.

Market Value: The highest price a willing buyer would pay and a willing seller accept.

Masonry Construction: A form of construction which incorporates self-supporting walls of masonry, except that its floors and roofs may be of combustible materials (e.g. wood).

Master Policy: An insurance policy which covers a group of persons, e.g. health or life insurance. Usually, there is only one master policy and the participants are provided with certificates to show their participation.

Mediation: Act of a third party to intervene between two parties with a view to persuading them to adjust or settle their dispute.

Meeting of Minds: The parties’ mutual agreement to substance and terms of a contract.

Minimum Retained Premium: The minimum amount of premium an insurer will retain in the event the policy is cancelled prior to its expiry.

Miscellaneous Bond: Surety bond other than a contract bond, e.g. license and permit bonds.

Moral Hazard: Subjective characteristics of the applicant that could cause a peril to occur.

Morale Hazard: Arises out of carelessness or indifference to loss because of the presence of insurance.

Mysterious Disappearance: Involves the loss of property under circumstances which cannot be explained.

Named Insured: The person specifically named in the policy, usually the one initiating the contract.

Negligence: Failure to use that degree of care which an ordinary person of reasonable prudence would use under the given circumstances.

Negotiable Instrument: Thing having value that may be transferred from one to another in the normal course of business, e.g. cash, cheque, bond, etc.

Net Premium Earned: The part of net written premium which relates to the expired portion of the policy term.

Net Premium Written: Total premiums written by an insurer after deducting reinsurance premiums and refunded premiums.

Net Profit: Profits after deduction of all expenses, the amount of which may be classified as net before or after taxes.

Net Worth: Amount of money remaining after all assets have been liquidated and all liabilities cleared.

No Fault: A type of automobile insurance in which each person’s own insurance company pays for injury or damage up to a certain limit regardless of whether its insured was actually at fault.

Non-combustible: Materials which will not ignite or burn when subjected to fire.

Noninsurable Risk: One which is not subject to evaluation by actuarial means and for which insurance will not be written.

Non-Owned Automobile Insurance: Covers the insured against third party claims arising out of automobiles not owned in whole or in part by or licensed in the name of the insured.

Notary Public: One appointed by provincial Lieutenant-Governor and who is, generally, authorized to administer oaths and to attest to the authenticity of signatures.

Notice of Loss: Once a loss has been sustained, the conditions of the insurance policy stipulate that the insured must immediately make written notice to the insurance company advising of such loss.

Nuisance: That which endangers life or health, gives offense to senses, violates the laws of decency, or obstructs reasonable and comfortable use of the property.

Obligee: The person, firm, or corporation to whom someone else is obligated under a contract.

Obligor: One obligated under a contract or bond. Under a bond, both the principal and surety are obligors.

Obsolescence: The decline in a property’s value which is unrelated to physical changes in the asset itself but which is instead due to changes in technology and public taste which render the property less desirable on the market.

Occupancy: Taking possession of property and using it. In insurance, implies the use of the building only for those purposes described in the policy.

Occurrence: Generally, an unexpected event. In commercial liability policies usually defines as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”

Offer: A proposal to do a thing or pay an amount which, when accepted, constitutes a contract.

Offer and Acceptance: Two elements of a contract constituting mutual assent.

On Board Bill of Lading: A bill of lading confirming the receipt of merchandise and the fact that it was loaded on board the ocean vessel.

On Deck Bill of Lading: A bill of lading which states that the cargo has been stowed on deck and is at the shipper’s risk. The carrier is not liable for loss or damage unless due to gross negligence.

Open Cargo Policy: In marine insurance, policy designed for persons having a regular turn-over of goods in transit and which covers all sendings within the scope of insurance. Premiums are debited monthly or quarterly.

Optional Settlement Clause: Clause in insurance policy which allows insured to select method in which settlement will be made, e.g., Homeowners Forms allow for settlement of claim to dwelling on either of ACV or replacement cost at option of insured.

Order Bill of Lading: Bill of lading stipulating goods be delivered to the order of the named consignee, i.e., others may take delivery of the goods on the consignee’s behalf.

Ordinary Care: Degree of care which persons of ordinary care and prudence are accustomed to use and employ, under the same or similar circumstances. Substantially synonymous with “reasonable” or “due care.”

Other Insurance: Clause found in property insurance policies stating what is to be done in event other policies cover the same property.

Outbuilding: Building used in connection with a main building and generally separated from it, e.g., storage shed, garage.

Package Policy: Policy which covers two or more lines or types of insurance in the same policy.

Particular Average: In marine insurance, a partial loss to a specific shipment, other than a general average

Partnership Insurance: Insurance purchased on life or health of business partners to enable business to continue in event of disability or death of a partner.

Peak Season Endorsement: Provides increased coverage for stock inventories during peak seasons.

Performance Bond: Guarantees that contractor will perform contract in accordance with its specified terms and conditions. Generally contains additional guarantee that faulty work will be corrected and defective materials replaced for a period of one year after completion of performance.

Peril: The cause of a loss (e.g. fire, hail, etc.).

Period of Indemnity: Defines the length of time for which indemnity is payable in business interruption and disability policies.

Permission Clause: Clause in certain property insurance policies which gives policyholder permission to use insured premises for normal purposes relating to occupancy.

Personal Injury: While technically an injury to one’s person, this term is used in policies of liability insurance to mean injury other than bodily injury and arising out of libel or slander, malicious prosecution, false imprisonment, wrongful eviction, etc.

Personal Lines: Insurance for individuals and families, e.g. private passenger automobile, homeowners, etc.

Physical Hazard: Condition relating to the use of tangible property which could cause a peril to occur.

Physical Injury: Bodily harm or hurt, excluding mental distress, fright, or emotional disturbance.

Plaintiff: One who brings a legal action against another.

Policy: Term used to describe all contracts of insurance, including all clauses, riders, endorsements and renewals.

Power of Attorney: Written authorization to act as one’s agent or attorney.

Pre-existing Condition: Physical condition existing prior to effective date of policy.

Pressure Vessel: Vessel designed to hold liquids or gases under pressure, e.g. boiler, hot water heater, etc.

Prima Facie: A fact which, at first sight, is presumed to be true unless evidence is provided to contrary.

Primary Liability: A liability for which a person is directly responsible.

Primary Policy: In insurance, that policy which pays first before nay recovery is made from another.

Principle of Indemnity: Doctrine that an insured is entitled to the actual amount of his loss, no more and no less.

Probate Bond: Bond required by the probate court or judge of administrators, executors and guardians guaranteeing the faithful performance of duties as prescribed by law.

Primary residence: The place where you spend the majority of your time is your primary residence.

Product Liability: Refers to the legal liability of sellers and manufacturers for injury or damage caused by defective products sold or made by them.

Profits Insurance: Business interruption form of insurance which covers loss of income as a result of loss of sales due to physical damage to insured’s premises by an insured peril. Indemnity Period commences at time of loss and continues until income is restored to the level that would have resulted had the loss not occurred, subject to the Indemnity Period selected (usually 12 months).

Proof of Loss: Formal statement made by insured to insurer regarding a claim, giving details of loss in order that insurer can determine the extent of its liability.

Property Damage: Commercial liability insurance policies generally defined as “physical injury to tangible property, including all resulting los of use of that property; or loss of use of tangible property that is not physically injured.”

Property of Every Description: Method used to insure commercial building, equipment and stock under a single limit of insurance.

Property insurance: Covers an insured’s property against loss or damage from insured perils.

Protection & Indemnity Insurance (P & I): A marine insurance policy designed to protect ship-owner against liability to third parties for injury or damage caused “whilst at sea and in operation contiguous to the sea” including loss of life, pollution, property damage to cargo, piers, docks, etc.

Proximate Cause: The most direct cause of loss, that is the most effective though not necessarily the last, in a series of event.

Rate: A charge for insurance based on factors relating to insurable qualities, market conditions, etc.

Reasonable Care: That degree of care which a person of ordinary prudence would exercise in similar circumstances. Substantially synonymous with ordinary care or due care.

Receivership: Condition of a business or individual over whom a receiver has been appointed for protection of its assets and for ultimate sale and distribution to creditors.

Reinsurance: Insurance of an insurer; a contract that one insurer makes with another insurer to protect the first insurer against loss or liability arising out of a risk it has already assumed.

Released Bill of Lading: Type of affreightment where no specific value has been declared for carriage.

Rental Value Insurance: Insurance coverage designed to insure loss of income to owners of tenanted properties made untenable as a result of an insured loss.

Replacement cost: The cost of replacing, repairing, constructing or reconstructing, whichever is the least, the property on the same site with new property of like kind and quality and for like occupancy without deduction for depreciation.

Reserve: Funds set aside by the insurer to meet future claims and obligations.

Retail Store Policy: Package policy generally combining fire, business interruption, crime and liability coverages for a retail store.

Return Premium: A refund to the insured, generally as a result of cancellation, or reduction in insurance amount.

Rider: A document issued by the insurer that modifies the policy by expanding or restricting its benefits. Similar to endorsement.

Risk Management: The process of making and carrying out decisions that will minimize the adverse effects of accidental losses upon an organization.

Running Down Clause: In marine insurance, clause on hull policies which covers third party liability of ships for property damage caused by collision.

Salvage: Generally, that property remaining or saved after a loss. Also that portion of property which is taken over by the insurer after payment of a claim for loss. The insured may retain possession of the salvage property, at which time the insurance company will deduct the salvage value from the amount of the claim paid.

Schedule: A comprehensive listing of property, locations and amounts insured, and the applicable conditions. Also, a formula applied to determine an insurance rate.

Self-Insured Retention: (a) Amount of risk a self-insurer agrees to assume. (b) On Umbrella Liability Insurance Policy, that amount to be assumed by insured before policy will pay.

Semi-detached home: A semi-detached home is a unit where one of the walls is shared by one other person’s residence.

Sewer Back-up Option: A regular property policy provides coverage any damages caused by a “sudden, accidental discharge of water in your home.” This includes coverage for freezing pipes and the overflow of water from public water mains carrying drinking water (e.g. a bathtub overflow).

Short Rate Cancellation: When the insured terminates the policy prior to its expiry, the insurer is entitled to calculate the refund on a short rate basis, the amount of which is less than the proportionate part that remains unearned.

Standard Mortgage Clause: Clause designed to protect the interest of the mortgagee. Contains terms agreed to by mortgagee and insurer respecting the insurance policy, e.g., provides for payment to mortgagee in circumstances where insureds themselves would be denied coverage, outlines requirements where policy changes or termination requested, etc.

Standard of Care: In law of negligence, that degree of care which a reasonably prudent person should exercise under same of similar circumstances.

Statement of Values: Statement required to be filed by insured indicating value of all property insured. May be required to be verified by appraisal or other means acceptable to insurer.

Statute of Limitations: Prescribes the periods within which actions may be brought or within which certain rights may be enforced.

Statutory Conditions: Legislated policy conditions outlining duties and responsibilities of insured and insurer under contracts of automobile insurance, accident and sickness insurance and fire insurance.

Stock: A merchant’s or tradesman’s good and wares kept for sale and traffic. In commercial property insurance policies may include all merchandise usual to the business of the insured, packing, wrapping and advertising materials are similar property belonging to others which the insured is under and obligation to insure or for which he is legally liable.

Strict Liability: A person is presumed to be guilty of an offence without the requirement of the plaintiff to prove negligence. This is generally applicable when injury or damage is caused by dangerous activities, hazardous products, etc.

Subrogation: The lawful substitution of a third party in place of a party having a claim against another party. In insurance and surety contracts, the insurer has the right to “step into the shoes” of the party whom it has compensated and sue any party whom the compensated party could have sued.

Subscription Policy: One in which a group of insurers have agreed to participate.

Summons: A writ delivered to a person advising that an action has been commenced against him/her in a court of law and requested his/her appearance on the date specified to answer to the charge.

Third Party: One who is not a party to the insuring agreement but who may have rights therein.

Time of Risk Charge: The premium charged for an incomplete period of insurance, e.g., for a binder that did not result in a policy being issued.

Total Loss: Complete destruction of insured property. Also, a loss is a total loss when there is nothing substantially remaining which could be used as a basis of restoring the whole.

Trespass: An unlawful interference with one’s person, property or rights.

Trip Transit Insurance: Policy designed to provide coverage for a specific trip, as opposed to a length of time.

Trustee: (a) One who holds the legal title of property for the benefit of another. (b) One standing in a fiduciary or confidential relation to another, e.g., agent, attorney, bailee, etc.

Umbrella Liability Policy: Liability policy which provides excess limits and which also drops down to insure exposures not insured under primary or underlying policies.

Underinsured Motorist Coverage: Generally, an endorsement to an automobile policy which insures death or bodily injury to an insured when caused by an underinsured or uninsured motorist. The limit of coverage is the difference between the liability limit of the insured’s policy and that carried by the motorist at fault. (In B.C., this coverage is known as Underinsured Motorist Protection.)

Underwriter: (a) The one assuming a risk in return for the payment of a premium. (b) The person within the insurance company authorized to accept or reject applications for insurance.

Underwriters’ Laboratories of Canada (ULC): Not-for-profit organization founded in 1920. Operates laboratories and a certification service for the examination, testing and certification of devices, construction materials and services to determine their bearing on fire, accident and property hazards.

Uninsured Motorist Coverage: Coverage provided on automobile policies and which is intended, within fixed limits, to compensate victims of automobile accidents for bodily injury caused by an uninsured motorist.

Unoccupied: Property is usually considered to be unoccupied where the premises are complete with its contents, except that such person who normally occupies the premises is temporarily away.

Vacant: Empty of contents. Implies abandonment and non-occupancy for any purpose.

Vandalism: Wilful destruction of property

Vicarious Liability: Indirect legal responsibility, e.g., an employer is liable for the acts of an employee, while in the commission of his duties.

Voluntary Compensation Insurance: An endorsement which provides no fault benefits to employees of a business not covered under the Provincial Worker’s Compensation Plan. Does not remove necessity of purchasing Employer’s Liability coverage for such employees.

Voluntary Medical Payments: Coverage designed to pay for medical expenses to others who are accidentally injured on an insured location or by the activities of an insured, resident employee, or an animal owned by or in the care of an insured. These payments are not based on the law of negligence.

Voluntary Property Damage: Coverage designed to pay for physical injury to tangible property, including all resulting loss of use of that property; or loss of use of tangible property that is not physically injured. No negligence on the part of the insured has to be proven for payment to be made.

Waiting Period: The period of time during which an insurance policy is not in effect or for which no payment will be made on the policy.

Waiver: The unilateral and voluntary relinquishment of a known right.

Waiver of Subrogation: Provision stating coverage will not be prejudiced if the insured has waived any rights of recovery from a responsible party in writing prior to a loss.

Warranty: A promise that certain facts are true as they are represented to be and that they will remain so.

Without Prejudice: When an offer or admission is made “without prejudice,” it signifies that no rights or privileges of the party concerned are to be considered as thereby waived or lost, except in so far as may be expressly conceded or decided.

Worker’s Compensation Acts: Provincial statutes which provide employees or their dependents with no fault insurance benefits in event of employment-related accidents and diseases.

Written Premium: Total of all premiums for policies issued and renewed in a given period.

Wrongful Act: An act which will infringe upon the rights of another to his damage.