Glossary of Terms

JMHI Insurance Related Image

The terms found in this glossary are not statutory definitions, and are not to be used for legislative interpretation or litigation purposes.


A Tort
Wrongfully; unjustly; without reason.

A Tort Ou A Droit
Right or wrong.

Associate of the Chartered Insurance Institute. (British)

Associate of the Insurance Institute of Canada. Now replaced by the CIP designation.

To voluntarily relinquish all right, title, claim and possession of property with the intention of not reclaiming it.

A lapse in succession when there is no one in whom title is vested.

Abridgment Of Damages
In certain cases, the right of the court to reduce a damage award.

Absent Renewal
An employer may wish to engage an employee on a temporary or contract basis, with the understanding that upon the expiry of the .fixed term of employment or at the end of the contract, the employment relationship will be at an end and the employee will not be entitled to any compensation as a result of the termination of the employment relationship.

Absentee Landlord
Normally the owner of real property who does not live on the premises.

Absolute Guaranty
An unconditional guaranty that a debtor will pay his debt or perform his obligation.

Absolute Liability
Responsibility without fault or negligence.

Abstract Of Title
A concise chronological history of the title to land, consisting of a summary of all the conveyances which in any manner affect said land, or any estate or interest therein, together with a statement of all liens, charges, or liabilities to which the same may be subject, and of which purchasers must be apprised.

Abutting Owner
An owner of land which abuts or adjoins.

Accelerated Depreciation
A method of depreciation that yields larger deductions early in the life of an asset compared to the straight-line method of depreciation.

Accelerated Depreciation
Methods of depreciation that yield larger deductions early in life of an asset.

Acceleration Clauses
A penalty clause that permits the rent due during a period to be accelerated.

When the insurer agrees to accept the application and to issue a policy and communicates same to applicant.

An unforeseen event or occurrence at a given time and place, occasioning physical injury to person or property. A more comprehensive term than “negligence”.

Accident and Health (Sickness) Insurance
Insurance which undertakes to indemnify the individual for loss as a result of an accident or illness. Payment is usually a fixed rate per month while the consequent disability lasts, and sometimes includes the payment of a fixed sum to his heirs in case of death by accident within the term of the policy.

Accident Year Experience
Matching losses with premiums earned during a specific period.

Happening by chance; fortuitous.

Accidental Injury
A bodily injury caused by accident.

Accommodation Business
The request for coverage on a risk which is substandard or marginal but which the underwriter agrees to accept as a favour or accommodation to the broker.

Accommodation Line
A risk which would ordinarily be rejected on a strict underwriting basis but is accepted by an insurer to maintain a good relationship with a valuable agent/broker.

One who knowingly and voluntarily assists in the commission of a crime.

Account Current
The details of premiums written, return premiums, commissions and net amount due to balance that is regularly reported by an agent/broker to the insurer.

Accountability is the ability to measure actions and the willingness to bear the consequences of one’s actions, whether positive or negative.

Accounting – Accrual Basis
Showing expenses incurred and income earned for a given period, although they may not have been actually paid or received.

Accounting – Cash Method
Income and expense are recorded only when received or paid out.

Accounts Receivable Insurance
Protects business against inability to collect accounts receivables because of loss of supporting records from an insured peril.

Accrued Liability
Obligation which has been incurred but not yet paid; e.g., lease payment, taxes.

Acid Test
An accounting test that measures the ability of a business to pay its current lia-bilities. Sum of cash, marketable securities, and receivables divided by current liabilities. Also called the “quick ratio.”

Acquisition Cost
The cost of putting business on the books. For an insurer, such costs can include agents/brokers’ commissions, office overhead costs, and premium tax.

n. In a general sense, signifies something done voluntarily by a person.

Act Of God
A flood, an 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.

Actio Ex Delicto
In civil and common law, an action arising out of fault, misconduct, or malfeasance.

A suit brought in a court; a formal complaint within the jurisdiction of a court of law.

Action Plan
The term action plan is used to refer to plans that would apply to a particular business unit and generally have a one-year time horizon. Action plans are much more detailed than the strategic plan for the entire brokerage.

Activities Standards
Involves evaluating the effectiveness of the risk management program using standards based on activities, not based on, what for the most part are, uncontrollable losses.

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

Actual Damages
The amount awarded to compensate for one’s actual and real loss or injury.

Actual Loss
Loss resulting from the real and substantial destruction of the insured property.

Actual Loss Sustained
Refers to 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 Total
Loss In marine insurance, the total loss of the vessel or insured property.

Actual Total Loss
In marine insurance, a loss in which the subject property is totally lost or is so badly damaged that it has no value left.

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

Additional Interest
Same as Additional Insured.

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

Additional Premium
An extra premium charged during the policy period for an alteration which increases the hazard or the liability to the insurer.

Where mail and other communications will reach person.

Adjacent Property
Property lying near or close to the insured property which may affect the hazard or loss or the premium rate.

To determine the amount to be paid to insured by insurer to cover loss or damage sustained.

A representative of the insurer who seeks to determine the extent of the firm’s liability for loss when a claim is submitted.

Adjuster’s License Bond
Guarantees reimbursement to a claimant of the loss suffered as a result of any improper or illegal act of an adjuster.

The ascertainment of the amount of a loss and the ratable distribution of it among those liable to pay it.

A person appointed by the court to manage the assets and liabilities of a deceased person.

Admiralty Bond
In marine insurance, replaces the ship as security and guarantees payment of whatever amount may be awarded to the claimant. Once the bond is posted the ship is released.

Admiralty Courts
Courts of law which deal with matters pertaining to the sea.

Admitted Company
Insurer or reinsurer licensed or approved to conduct business in a particular jurisdiction.

One who has attained the legal age of majority, generally 18 years. At civil law, a male who had attained the age of 14 and a female who had attained the age of 12.

In marine insurance, an agreed percentage increase applied to the total of invoice plus freight, for unknown expenses at the time of shipment, and also for a portion of the insured’s profit.

Advance Payment Bond
Guarantees the principal will use monies advanced from construction or other contract for purpose intended.

Advance Premium
The initial payment made at the beginning of a policy period where the policy provides for premium adjustments during its term or at its expiration.

In marine insurance, the exposure of property to risk at sea.

Adverse Selection
Situation occurring when applicants for insurance are largely those most likely to suffer a loss. If an insurance company did not properly screen all proposals for insurance, it would become the Victim of adverse selection.

Advertiser’s Liability Insurance
Covers against claims for libel, slander, defamation, infringement of copyright, etc., arising out of its advertising program.

Advisory Council
An advisory council is comprised of members of. brokerages who sell their products. These councils meet regularly to discuss company policy and how the decisions made by the insurance company affect the production force.

Aesthetic Value
The artistic worth of something as contrasted with its practical value.

A written or printed declaration or statement of facts, made voluntarily, and sworn before a person having authority to administer such oath or affirmation.

A condition of being in close connection, allied, associated, or attached as a member or branch.

Affirmative Warranty
Confirms a fact is in existence at time insurance policy is entered into, as contrasted to a promissory warranty which requires that something be done or not done after policy has taken effect.

Affreightment Contract
In marine insurance, contract which sets forth the obligations of both shipper and carrier concerning transportation of the merchandise. The most common forms of affreightment are Bills of Lading and Waybills.

Against Public Interest
Act or agreement which has been declared to be detrimental to the general good or public welfare.

Age Of Majority
Age at which a person may contract, execute a valid will or vote, and age at which payments for support by parents may generally be terminated, now 18 in most jurisdictions.

The relationship established by contract whereby one person, known as the principal, employs and authorizes another person, called the agent, as a representative in business transactions with third parties.

Agency Agreement
An Agency Agreement will provide the brokerage with the authority to bind the insurer for certain classes of risks and limits.

Agency Contract
Legal agreement between an insurer and an agent/broker outlining their respective rights and duties.

Agency Experience
Insurance agency’s loss ratio used by insurers to assess an agency’s profitability.

Agency Number
Number issued by insurer to agent or agency under which all transactions are recorded.

A person authorized by another to act for him. One who represents and acts for another under the contract or relation of agency. In insurance, person authorized to represent insurer in dealing with third parties in matters relating to insurance.

Agent Of Record
The agent indicated on each insurance policy, binder, bond or acceptance.

Total amount.

Aggregate Limit
The aggregate limit stated on the Declarations is the most the policy will pay during the policy period for all claims for which insurance is provided.

Aggregate Products Liability
Total amount which the liability policy will pay for claims arising out of the use and distribution of products during policy period.

Extreme physical pain or mental distress.

Agreed Amount Clause
Clause in policy providing that the insured will carry a stated amount of insurance coverage.

Agreed Value
The agreed value on an ocean marine cargo policy is how much is insured regardless of the fact that this value may be below or above the true value.

The coming together of two or more minds with respect to their rights and duties.

Agreement For Insurance
A short term agreement often made prior to filling out and delivery of a policy with specific stipulations. See Binder.

Agricultural Equipment Floater
Insures equipment usual to a farm or ranch.

Air Cargo Liability Insurance
Covers the legal liability of an air carrier for loss or damage to cargo while in its care, custody or control.

Air Carrier Bond
Guarantees passengers will not be left stranded by charter flight operators.

Aircraft Hull Insurance
Covers physical damage to aircraft while in flight or on the ground.

Aircraft Liability Insurance
Protects insured for liability for property damage and bodily injury arising out of the ownership or use of insured aircraft.

Aircraft Passenger Liability Insurance
Protects insured for liability resulting from bodily injury, sickness or disease suffered by passengers arising out of ownership or use of the insured aircraft.

Aircraft Product Liability Insurance
Protects those who manufacture, sell or repair or maintain aircraft, their components and equipment against liability resulting in injury or damage caused by defects in the products or from improperly completed operations.

Alien Company, Carrier or Insurer
A company doing business in Canada but incorporated in a foreign country.

Alienation Clause
In fire insurance policy, provision voiding such policy upon transfer of ownership by insured.

All Risk Policy
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.

Allied Lines
Coverages which are associated with property insurance.

To make a change in some of the elements or ingredients or details without exchanging an entirely new thing or destroying the identity of the thing that is affected.

Alternative Dispute Resolution
To refer disputes between parties to a mediator or arbitrator to help resolve the issues. Mediation Dispute resolution which allows each party to weigh respective concerns and interests of their own case and the opposing party’s case in a more direct and personal manner. Arbitration may be binding or non-binding and involves a decision by an impartial arbitrator adjudicating the merits of the case.

Lack of clearness or definiteness; capable of having more than one interpretation.


To improve.

A change or modification for the better.

Amortization Period
Amount of time required to discharge a financial obligation.

Amount Covered
The amount that is insured and for which insurer is liable under a policy of insurance.

Amount of Insurance
The limit of payment for which an insurer is liable under the policy.

Amount Subject
The value which may reasonably be expected to be lost in one fire or conflagration.

Extreme pain of body or mind, particularly mental suffering or distress of great intensity.

Animal life other than human. Domestic animals are tame, living in or near a person’s home. Wild animals are generally those who are undomesticated and live in the wild.

Anniversary Date
Yearly recurring date of the initial issuance date of the policy.

Coming or happening yearly.

An investment of money entitling investor to series of equal annual sums.

Abolish, cancel; declare invalid.

Anti-Discriminatory Laws
Those laws which prohibit companies from giving preferential terms or rates not warranted by the underwriting of the risk.

Apparent Authority
In the law of agency, such authority as the principal knowingly or negligently permits the agent to assume, or which he holds the agent out as possessing.

Apparent Authority
Authority which the principal, although not actually granted, knowingly permits the agent to exercise, or which he believes him to possess.

Apparent Defects
Defects in goods which can be readily seen.

Resort to a higher court to review the decision of a lower court or administrative agency that is deemed erroneous in the application or interpretation of the law or the facts.

Appeal Bond
The bond given on taking an appeal, by which the appellant and his sureties are bound to pay costs if he fails to prosecute the appeal with effect.

The party who appeals the decision of a lower court to a higher court.

Appellate Court
Court having jurisdiction of appeal and review.

Appellate Courts
Review decisions of inferior courts, and may be either courts of appeals or supreme courts.

The party requesting insurance

Initial request, declaration, or statement made when applying for an insurance policy. Can be verbal, written or by use of a printed form.

To assign power to discharge the duties of a particular office or trust.

To allocate and share proportionally.

When more than one policy involved in a loss, the process through which it is determined how much each policy on a risk must pay.

Apportionment Clause
Clause which distributes insurance in proportion to the total coverage.

A valuation or an estimation of value of property normally done by experts who have no personal interest in the property.

(Statutory Condition) A clause in insurance policy which extends right to insured and/or insurer to demand an appraisal of damaged or lost property.

To fix or set a price or value upon a thing, usually in writing.

A just and true valuation of property, especially that seized by Court, or in execution or by distraint.

One who, because of specialized knowledge, is selected or appointed to make an appraisement.

Something which belongs to something else, e.g., appurtenances of automobile. Usually, the two will remain in relationship, and will pass with ownership.

A person bound to decide according to the rules of law and equity, as opposed to an arbitrator, who may proceed wholly at his own discretion.

Reference of a dispute to an impartial third party chosen by the parties to the dispute who agree in advance to abide by the arbitrator’s award. The award is issued after a hearing at which both parties have an opportunity to be heard.

Arbitration Clause
Clause in a policy of insurance, reinsurance, or other contract that provides for compulsory arbitration in the event of a disagreement between the parties.

Private, disinterested person(s), chosen by the parties to a disputed question, for the purpose of hearing their contention, and giving judgment between them. The parties submit themselves in advance either voluntarily or compulsorily to the arbitrator’s decision.

A designer of buildings who prepares plans and superintends its construction.

Area Protection
Crime insurance. Prevents against intrusion into areas not protected by perimeter protection devices, i.e., the interior of buildings.

Taking custody of another for the purpose of holding or detaining him to answer a criminal charge or civil demand.

In marine insurance, a vessel’s arrival means an arrival for purposes of business, requiring an entry and clearance and stay at the port so long as to require some of the acts connected with business. Arrival does not include merely touching at a port because of adverse weather, for advice, orto determine the state of the market.

At common law, the malicious burning of the property by its owner or some other person.

Articles Of Incorporation
The basic documentation filed with the appropriate government agency when a business is incorporated.

Created or produced by man, as opposed to “natural”.

Artificial Persons
Persons created and devised by law. Corporations are examples of artificial persons.

One who is skilled in a trade, craft, / or art requiring manual dexterity.

Artisan’s Lien
An artisan’s legal right to possess the object that he has worked on until he has been paid for his labour.

As Is
When this expression is used in a sales agreement, it implies that the buyer takes the entire risk as to the quality of the goods involved and he must trust to his own inspection. Implied and express warranties are excluded in sales of goods “as is”.

As Soon As Practicable
Within a liability policy, requires the insured will notify the insurer of an occurrence within a reasonable time in view of all the facts and circumstances of each case. This does not mean the same as “as soon as possible.’

Any wilful attempt or threat to inflict injury upon the person of another, if it is appar-ent that the ability to injure is present. Also, any intentional display of force such as would give the victim reason to fear or expect immediate bodily harm. It would be considered an assault even if there is no actual touching, or striking, or doing bodily harm, to another person.

Assault And Battery
Any unlawful touching of another which is without justification or excuse. Battery requires physical contact of some sort whereas assault is committed without physical contact. See Battery.

A number of persons meeting or gathering at the same place. Also refers to the persons so gathered.

Approval of something done.

Assessable Insurance
Insurance policy under which an insured is liable to pay an additional premium if losses prove to be unusually large.

Assessment Insurance
Type of mutual insurance where the policyholders are levied an amount whenever there is a loss.

All property, real, personal, tangible and intangible, that belongs to any person including a corporation and the estate of a decedent.

To transfer to another.

Assigned Risk
A risk which is poor and not ordinarily acceptable to insurers but for which coverage is required by provincial statute and which is, therefore, assigned to insurers participating in an assigned risk pool.

Assigned Risk Plan
A plan between insurance companies who are compelled to write coverage for persons who are unable to buy coverage in those provinces having compulsory motor vehicle insurance.

One to whom an assignment is made.

The legal transfer of an entire interest from one party to another.

Associate of the Chartered Insurance Institute (ACII)
A professional designation (Britain) earned by examination following study courses.

Associate of The Insurance Institute of Canada) (AIIC)
A professional designation (Canada) earned by examination following study courses. Replaced by the CIP designation.

To promise or undertake. In insurance, to agree to insure a risk is to “assume” it.

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.

Assumed Portfolio
Insurer’s transfer of insurance liability to a reinsurer to settle all liabilities of a partial or total portfolio of the insurer for appropriate consideration.

Assumption Certificate
Coverage provided by a reinsurer which guarantees payment to parties not participating in the reinsurance contract.

Assumption Of Risk
The doctrine of assumption of risk, also known as volenti non fit injuria, means legally that a plaintiff may not recover for an injury received when he voluntarily exposes himself to a known and appreciated danger.

Term used in England and Canada which is synonymous with “Insurance”.

Used interchangeably with “insure” in insurance law.

One who has been insured by an insurance company or underwriter against losses or perils as indicated in the insurance policy. Synonymous with “insured”.

Insurer against certain perils and dangers.

To seize property under a writ of attachment. In insurance, a policy “attaches” when it comes into force.

A remedy to an action by which the plaintiff is granted the right to acquire a lien upon a defendant’s property to satisfy a judgment which the plaintiff may obtain.

Attachment Bond (Defendant’s)
A bond used to dissolve an attachment in order that the property subject to the attachment can be sold or disposed of. Such a bond would suffice to satisfy the plaintiffs judgment.

Attachment Bond (Plaintiffs)
A bond which the court requires a plaintiff to furnish which indemnifies the defendant against loss or damage if the property taken as security by the plaintiff from the defendant is not returned should the plaintiff lose his case.

Attachment Of Risk
Used to describe that time when title passes when risk of loss for destruction of property which is subject of sale passes to buyer from seller.

(a) To witness a signature. (b) To certify to be true or genuine.

In a general sense, denotes an agent or substitute, or one who is appointed and authorized to act in the place or stead of another. Usually, however, it means “attorney at law”, “lawyer” or “counsellor at law”.

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.

One who is authorized to sell lands or goods of other persons at public auction. This is different from a broker in that a broker may both buy and sell, whereas an auctioneer may only sell. Another difference is that brokers may sell by private contract only, whereas auctioneers sell by public auction only.

(a) Survey of insured’s books, made to determine the premium which should be paid the insurance company for protection furnished where the premium is based on the insured’s payroll, gross receipts, values on hand or units handled or sold. (b) Revenue Canada performing an inspection and verification of a taxpayer’s return or other transactions possessing tax consequences.

One who checks accounting records and statements for accuracy, fairness, and general acceptability and then attests to them.

The power delegated to an agent by a principal. Permission.

Authority By Estoppel
Authority that is apparent and not actual, being placed on the principal as his conduct has been such as to mislead, so that it would be unjust to let him deny it.

Authorized Company
An insurance company licensed to do business in a province.

Auto Theft
The stealing away of a motor vehicle from the owner or possessor with the intention of depriving him permanently of it.

Automatic Coverage
Certain policies provide automatic coverage which provides coverage for property other than that covered at the commencement of the contract if and when the policyholder acquires ownership, or in the event of some similar happening which the policy describes.

Automatic Premium Loan
In a life insurance policy, a provision that allows if the premium is not paid by the policyholder within the allotted time after the due date, the amount of the premium will be loaned to him automatically. It is limited to the cash value of the policy and ceases when the cash value of the policy is not sufficient to cover the loan plus applicable interest.

Automatic Reinstatement
Once a claim has been paid or property restored, most policies automatically return the stated limited of insurance to its original amount.

Automatic Sprinklers
A water sprinkler device which protects property from fire damage.

Automobile Fleet
A number of automobiles which are owned and managed by the same entity.

Automobile Insurance
Insurance policy designed to insure exposures arising out of ownership or operation of an automobile, including but not limited to third party liability, accident benefits and physical damage to the insured automobile.

Auxiliary Heating
A heat source which is used in conjunction with a primary source of heat (e.g. woodstove)

In marine insurance, partial loss or damage.

Average Adjuster
A marine adjuster who carries out the following role: In the case of a general average the average adjuster prepares a statement showing what portion of a loss is payable in general average by each of the parties to the adventure in accordance with the rules set down in the bill of lading and rules or practice of the Average Adjusters Association and by marine law. In a partial loss or total loss the average adjuster ascertains what portion of loss is covered by marine insurance policies in accordance with law and practice and apportions it over the policy or polices with the amount covered by the policy.

Average Clause
An insurance policy clause that states that similar items covered by one insurance policy shall each be covered in the proportion that the value in each bears to the value in all.

Average Rate
When more than one item is insured in a single policy of insurance for a single amount of insurance, the amount of insurance on each is multiplied by its rate. The sum of all the premiums divided by the total amount of insurance will produce an “average” rate for the whole.

Average Risk
A risk in accordance with the conditions called for in establishing the basic rate.

Aviation Clause
Found in some life insurance policies which limits the insurer’s liability if a claim arises from certain actions related to flying, e.g. pilot, flying instructor or student.

To annul; cancel; make void; to destroy the efficacy of anything. To evade; escape.

Avoidable Consequences, Doctrine Of
The doctrine which imposes duty on an injured person to minimize damages.

In marine insurance, the right of an underwriter, in the event of a breach of good faith or delay in commencement of an insured voyage to step aside from the insurance contract and treat it as though it had never been accepted.

v. After careful weighing of evidence, to grant, concede, or adjudge to, e.g. a jury awards damages, a municipality awards a contract.

n. The decision rendered by arbitrators or commissioners.


Predating a document prior to the date it was actually drawn, which does not affect its negotiability.

Bad Debt
A debt that is deemed uncollectible.

Bad Faith
Fraud; the intent to mislead or deceive; conscious doing of a wrong for dishonest purposes. Differs from negligence in that the person is operating with furtive design or ill will.

Bail Bond
A bond which guarantees the appearance of a person in court to answer a legal summons. Failure to appear forfeits the bond amount.

In the law of contracts and property, one to whom goods or property are entrusted. Can be either gratuitous (for no consideration) or for hire (for consideration).

Bailee For Hire
One who has temporary possession of personal property of others for a purpose other than sale and who is compensated for caring for it.

Bailee Policies
Policies which provide coverage on goods of others while in possession of bailee.

Bailee’s Lien
Bailee’s right to retain goods in his possession (bailed goods) for payment of services.

The act of placing goods in the possession of a bailee.

Bailment For Hire
A contract whereby it is agreed the bailor will compensate the bailee.

Bailment For Mutual Benefit
One in which the bailor and bailee agree on a compensation in return for benefits flowing from the bailment, necessarily involving an express or implied agreement or undertaking to that effect, e.g. delivery of automobile to mechanic who, for a price, undertakes to repair it

One who delivers goods to another in the contract of bailment

In insurance, under surplus share reinsurance, the desired relationship between a reinsurer’s written premium and its maximum limit of liability.

Balance Sheet
Financial statement showing assets, liabilities and equity of a company in conformity with generally accepted accounting principles.

An incorporated institution that carries on the business of receiving money on deposit, cashing cheques or drafts, discounting commercial paper, making loans, and issuing promissory notes and bank notes.

Bank Draft
A cheque, draft, or other order for payment of money, drawn by an authorized officer of a bank.

Bank Inquiry Letter
Before issuing a bond, the surety corresponds with a contractors bank to determine his financial soundness.

Bank note
A bank-issued promissory note payable to bearer on demand.

Bankers Blanket Bond
Broad form of bond and insurance coverage designed for financial institutions, e.g. banks, credit unions, trust companies.

One who is unable to pay his debts as they become due. When used within the context of the Bankruptcy Act, refers to one who is liable to be proceeded against by his creditors therefore, or of one whose circumstances are such that he is entitled, on voluntary application, to take the benefit of the bankruptcy laws.

Bankruptcy Act
Federal law for the benefit and relief of creditors and their debtors in cases when debtors are unable or unwilling to pay their debts.

Bare Boat Charter
Charter where only ship is provided by ship owner. Person chartering ship is responsible for providing personnel, insurance and other necessary materials and expenses.

Bare Or Mere Licensee
One whose presence on premises is only tolerated. As opposed to a “licensee” or “invitee” who is on the premises by express or implied invitation.

Bareboat Charter
A document whereby one who leases or charters a boat becomes for all practical purposes the owner during that time.

To negotiate the terms of a purchase or contract

(Also spelled Barretry) In marine insurance, a criminal or wrongful act by the ship’s master or crew causing loss or damage to the ship or cargo.

When legal redress or recovery is obstructed by a bar or barrier, e.g. when a claim is “barred by the statute of limitations.”

The exchange of goods and/or services without using money.

Basic Bias
Is an interpretation of an insurance policy where the rights and duties of the insurer are tempered by the inequality of bargaining power between insured and insurer.

Basic Premium
The initial charge to which is added the premium developed by applying the rates as directed.

Basic Rate
The standard charge for a specific type of risk, subject to debit and credit adjustments.

Unlawful use of force to the person of another. Commonly combined in the term “assault and battery.” See Assault And Battery.

One who possesses an instrument, document of title, or security payable to bearer.

Bearer Bond
Bond payable to the person who possesses it.

Bearing Capacity
The load per unit area that the ground or structure can support with failing or settling.

To start; to come into existence.

To be the property of.

Something which is connected with a principal or greater thing.

One’s property and possessions. See Personal Effects.

Benchmarks are the established criteria against which actual results can be measured. Their purpose is to serve as a base for measuring performance.

Beneficial Enjoyment
The enjoyment one has of an estate in his own right, and not as trustee for another.

Beneficial Use
As distinguished from the rig ht of occupancy or possession, refers to one’s right to use and enjoy property according to his own inclination or so as to derive a profit or benefit from it.

Receiver of benefits. In insurance, one who is entitled to take proceeds on insured’s death.

Benevolent Associations
Charitable or philanthropic associations.

By will, to give personal property to another.

By will, a gift of personal property.

An agreement by which two or more parties agree that a sum of money or other valuable thing shall be paid or delivered to one of them on the happening or not happening of an uncertain event.

A temporary or permanent improvement beyond mere maintenance to a property which augments its value. Also used to describe the added value which a property receives if a public improvement such as street widening is undertaken.

A space which separates. When used to indicate a measure of distance, the two termini are excluded. Similarly, in computing the time in a case where something is to be done between two certain days, both the named days are to be excluded.

A formal offer to perform work or supply goods and services for a specified price.

Bid Bond
A guarantee that the contractor will enter into a contract, if it is awarded to him, and furnish such contract bond, sometimes called Performance Bond, as is required by the terms thereof.

Bid Date
The date on which bids must be submitted.

Bid Security
A financial guarantee in the form of a bid bond or certified cheque which accompanies the contractor’s bid guaranteeing that, if awarded the contract, he will execute the contract according to the contract documents.

One who offers to perform a certain contract for a specified price.

Bilateral Contract
A contract in which both parties are bound to fulfil obligations reciprocally towards each other.

Bill Of Adventure
A written certificate issued by the vessel’s owner or master, or a merchant stating that the property and risk in goods or cargo shipped in his own name is actually the property of another to whom he is accountable for the proceeds alone.

Bill Of Entry
A document prepared by importers for customs officer’s use describing goods and their values.

Bill Of Lading
A receipt of goods for shipment issued by person engaged in business of transporting or forwarding goods. It describes the cargo, gives the name of the consignor, terms of the contract for carriage, and directs where the freight is to be delivered.

To bring or place under definite duties or legal obligations.

A written or oral agreement from the insurer giving temporary protection to insured pending issue of the policy.

Binding Agreement
An enforceable contract

Binding Authority
Authority which is implied.

Binding Receipt or Slip
A temporary evidence of insurance usually issued by an authorized insurance agent or broker after taking an application for insurance and pending notice of acceptance or rejection from the insurer.

Blank Bill
Bill of exchange with blank where payee’s name should be.

Blank Cheque
Cheque which is signed but left blank where payee and/or amount is indicated.

Blanket Bond
Blanket Bonds, issued to bankers, brokers and others engaged in the financial field, are broad contracts of insurance covering losses of property as defined in the bonds, sustained by reason of dishonesty of employees, burglary, robbery, hold-up, theft, misplacement, mysterious disappearance, damage and destruction.

Blanket Contractual Liability
This coverage protects your business when liability arises from obligations you have assumed under specific or implied contracts with others.

Blanket Coverage
Insurance policies that allow insureds to select a single limit of insurance for all property falling within a specific class.

Blanket Fidelity Bond
Covers losses of money, merchandise or other property, real or personal, belonging to the employer or in which he has a pecuniary interest or which he may be holding in any capacity, when such loss is due to dishonesty of an employee.

Blanket Policy
Policy of insurance which covers two or more items, or two or more locations, in one aggregate sum without having to list separate amounts for each item.

Blanket Position Bond
Fidelity bond covering all of the insured’s employees.

Blanket Rate
Insurance rate applied when there is more than one property or subject of insurance insured in one policy.

Blind Selling
Selling wherein a buyer of goods is not given an opportunity to examine them.

Block Limits
An insurers acceptable limit of fire insurance within any one block or area.

Block Policies
Broad form of coverage which insures all property belonging to, or on consignment to, the insured, including property of others held by him.

In negligence cases, the failure to do what should have been done or the doing of that which should not have been done, resulting in an event or injury which could have been avoided by use of such care as a reasonably prudent person would have exercised under similar circumstances.

Board Of Directors
A corporation’s governing body who is elected by the stockholders to act on major matters affecting it, such as electing officers and declaring dividends.

Bodily Injury
Generally defined in liability policies to mean bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

Bodily Injury
Pain, illness or any impairment of a person’s physical condition.

Bodily Injury Liability
Liability which may arise from injury or death of another person.

Body Corporate
A public or private corporation.

Bona Fide
Sincere; without deceit. In utmost good faith.

An obligation of the insurance company or surety to protect one against financial loss caused by the acts or failure of another.

Bond Indenture
The contract between bondholders and the bond issuer.

Bonded Shipment
Shipments on which duty is payable, but which are permitted to travel to inland destinations before customs inspection is made and duty is actually paid.

Personal or corporate surety.

Something which is given in addition to what is ordinarily received or is due to be received by the recipient.

Book Value
Accounting terminology which values the assets of a company, deducts the liabilities, and divides that sum by the number of shares of common stock outstanding. This gives a going-concern value for the company, which generally has no relation to the market value. The valuation at which assets are carried on the books as based on cost less reserve for depreciation.

Border Line Risk
Risk which would ordinarily be rejected but is accepted from an agent with a good record of underwriting.

Summary of insurance or reinsurance transactions between agent and company.

One and the other.

In maritime law, a contract by which a ship’s owner pledges the ship or part of the ship as security against a loan used to equip or repair the vessel. The document stipulates that the lender shall lose his money if the ship is lost in the specified voyage by any of the perils listed. When the loan is made on the goods on board the ship, which are to be sold during the course of the voyage, the borrower’s personal responsibility is deemed the principal security for the performance of the contract.

Bottomry Bond
The document embodying the bottomry contract. A bond that mortgages the ship as security.

adj. The condition of being constrained by the obligations of a bond, contract, covenant, or other moral or legal obligation.

Natural or artificial separations which mark the confines or line of division of two bordering properties.

Braking Distance
Sometimes called stopping distance, the total distance required to stop a motor vehicle from time driver recognizes need to stop until vehicle is stopped. Vehicle speed, weather, road conditions, tires, and brake condition are some factors which control braking distance.

Brands and Labels Clause
This endorsement will reimburse you for costs when damage occurs to your property and it must be stamped as salvage or voided, or when your labels must be removed from the property items due to damage.

Failure to live up to the conditions or warranties contained in a policy.

Breach Of Contract
Failure, without legal excuse, to perform any promise which forms the whole or part of a contract.

Breach Of Covenant
The nonperformance of any covenant agreed to be performed, or the doing of any act agreed not to be done.

Breach Of Duty
In general terms, violating or omitting a legal or moral duty.

Breach Of Warranty
The failure or falsehood of an affirmative promise or statement, or the non-performance of an executory stipulation.

Breathalyser Test
The test administered to one arrested for operating a motor vehicle under influence of liquor. The test determines the alcohol content of the arrestee and are admissable evidence.

Brick Construction
Building constructed of brick and mortar.

Brick Veneer Construction
Frame construction with a single course of brick as an outside covering.

Bridge Policy
Inland marine policy which insures only bridges.

Bring Suit
To initiate a legal proceeding in a suit.

Broad Form Property Damage
This coverage expands your general liability policy to include certain property while in your care, custody, or control. When performing normal operations, the property is insured from damages resulting in a loss of use, for which you (or your business) are held liable.

Broken Stowage
The space in a ship not filled with cargo.

One who is an independent middleman, not tied to a particular company, who obtains insurance for his clients from insurance companies or their agents.

Broker of Record
The broker currently receiving commission to handle a policy.

One who is licensed to act both as broker and agent.

Brokerage Agreement
The terms and conditions for representation of an insurance company. Frequently called an agency agreement or agency contract.

Brokerage Contract
A contract of agency, whereby broker is authorized to make contracts on behalf of his principal, and for which he is paid an agreed commission.

Brokerage Market
Group of reinsurers accepting business mainly through intermediaries.

A financial plan coordinating resources and expenditures.

Buffer Layer
Coverage between maximum policy limit which a primary underwriter will write and minimum deductible over which excess reinsurer will cover.

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 usually available as coverage options.

Structure designed for habitation, shelter, storage, trade, manufacture, religion, business, education, and the like. Usually but not necessarily covered with a roof.

Building Code
Laws and regulations setting out construction standards in a jurisdiction.

Building Lien
The statutory lien of a material man or contractor for the erection of a building.

Building Permit
The authorization that is required by local governmental bodies prior to building, expanding or altering existing structures.

Building Rate
Fire insurance rate on a building, different from the rate on contents.

Gold and silver intended to be coined.

Burden of Proof
In the law, the need to prove facts in dispute.

Burglar Alarms
Devices which give warning that unauthorized persons are entering the premises.

In insurance policies, generally defined as the unlawful taking of property from within the premises by a person unlawfully entering or leaving the premises as evidenced by marks of forcible entry or exit.

Burglary Insurance
Insurance against loss of property caused by burglars.

Employment, occupation, profession, or commercial activity engaged in for gain, benefit, advantage or livelihood.

Business Corporation
Corporation whose purpose is the carrying on of a business for profit.

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.

Business Mix
The mix of business between personal and commercial lines.

Business Purpose
Property that may, or may not, be designated for commercial use.

Except that

Vertical or upright structure supporting a wall under lateral forces.

Buy And Sell Agreement
An agreement whereby surviving owners purchase the interest of a withdrawing or deceased owner.

Buy Back Deductible
A deductible which may be removed if additional premium is paid.

By Operation of Law
Effected by some positive legal rule or amendment

By-Law Endorsement
Insurance endorsement detailing how insurer deals with a claim which is affected by a local bylaw.

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


C. & F. (C.F.)
Meaning price includes cost and freight to named destination.

Canadian Accredited Insurance Broker.

Canadian Certified Insurance Broker.

Cost, Insurance & Freight – Price includes cost of the goods, insurance and freight to the named destination.

Collect on delivery. A sale term under which the carrier agrees to collect the cost of the goods from the consignee.

Canadian Professional Insurance Broker.

C.P.I.B. Canadian Professional Insurance Broker.
Professional Designation awarded upon successful completion of course of study. (See for more information).

Centre for the Study of Insurance Operations A national association of property and casualty insurers and independent insurance brokers working together. to achieving excellence in the delivery of value added electronic business solutions.

Great misfortune or cause of loss or misery, often caused by natural forces. See Act of God.

Calendar Year
Period from January 1 to December 31 inclusive. Consists of 365 days except Leap Year and 12 months of varying lengths.

Camera Floater
Extra property insurance policy which insures cameras and their equipment. Required when value exceeds policy limits.

Have a right to; have permission to.

Canada Customs Bond
Multi-purpose Customs Bond used for different customs situations.

Canadian Accredited Insurance Broker (C.A.I.B.)
Professional designation awarded upon successful completion of course of study.

Canadian Certified Insurance Broker (C.C.I.B.)
Professional designation earned by examination following study courses.

Termination of insurance before the end of the policy period by either the insured or the insurer or termination of the insurance policy, by the insured, on effective date.

Cancellation Clause
(a) Provision in insurance policy or bond stipulating how cancellation can be effected. (b) Provision in a contract or lease which permits the parties to cancel or discharge their obligations there under.

(a) Measure of an insurers ability to issue insurance contracts. Usually determined by measuring largest amount it will accept on a given risk or by the maximum volume of business the company is prepared to accept. (b) Legal qualification as the ability to understand the nature and effects of one’s acts.

Total assets used for the production of profits and wealth. Owners’ equity in a business.

Capitalization Method
Method used to measure value of realty for purposes of determining value of a mortgage. Involves making estimation of the gross income which the property should realize and the expenses needed to carry it A capitalization factor, expertly chosen, is then applied to the net income amount. Depreciation must be considered when using this method.

Captain Of The Ship Doctrine
Doctrine which imposes liability on medical surgeon in charge of operation for negligence of his assistants while they are under his control, even though they are also employees of the hospital.

Captive Agent
Agents who place all their business with one insurance company.

Captive Insurance Company
Insurance company entirely owned by another company. The insurance company insures risks of the parent organization and in some cases, those of non-related organizations.

In the law of negligence, the amount of care demanded by the standard of reasonable conduct must be in proportion to the apparent risk. Three degrees of care frequently recognized are: (i) Slight care-such as persons of ordinary prudence usually exercise about their own affairs of slight importance; (ii) 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 (iii) Great care – such as persons of ordinary prudence usually exercise about affairs of their own which are of great importance.

Care, Custody and 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.

Reckless, negligent.

The freight of a ship, train, truck, airplane or other carrier.

Transportation of goods, freight or passengers.

Carriage of Goods by Sea Act (C.O.G.S.A)
International agreement defining the responsibilities and liabilities of an ocean carrier transporting cargo.

(a) One who transports passengers or goods for hire. (b) Insurance company which “carries” the insurance.

Carrier’s Lien
Carrier’s right to hold cargo until payment for transporting it is made.

In insurance, to possessor hold.

Carte Blanche
Commonly used to mean unlimited authority or full discretionary power.

Case Law
The aggregate of reported cases as forming a body of jurisprudence, or the law of a particular subject as evidenced or formed by the adjudged cases, in distinction to statutes and other sources of law.

Money or its equivalent.

Cash Account
In bookkeeping, a record of all cash transactions.

Cash Flow
Cash funds created by business operation. Looks to the amount of cash left after all payments are made, whether they are tax deductible or not.

Cash Market Value
The same as fair market value, reasonable market value and fair cash market value.

Cash Surrender Value
(a) Cash value which may be stipulated in life insurance policy should insured request cancellation of policy before full term. (b) Amount the insured is entitled for the unused portion of his fire and casualty insurance policy. Usually referred to as a refund.

Cash Value
The value an aricle or piece of property would bring at sale

Cashier’s Cheque
Cheque drawn by bank which, when presented by payee, will be cashed by the bank.

Cashier’s Cheque
Same as a certified cheque.

Happening without design and without being predicted or expected.

Casual Employment
Short term employment for a limited and temporary purpose. Employee usually not entitled to seniority rights or fringe benefits.

Accident which is serious or fatal. Injured, lost or destroyed person or thing. A disastrous occurrence due to sudden, unexpected or unusual cause.

Casualty Insurance
Covers losses caused by injuries to persons and legal liability imposed upon the insured for such injury or for damage to the property of others. In practice, has come to mean that area of insurance not particularly concerned with life, fire or automobile insurance and which includes liability, burglary and glass insurance. Fidelity and surety bonds may also be included.

A major disaster.

Catastrophe Cover
Excess cover insurance companies purchase from reinsurance companies that will pay them if they suffer a large amount of loss as the result of an accumulation of net losses in a single event.

Catastrophe Limit
The maximum amount that the insurer will pay in any one disaster.

Catastrophe Number
Special number applied to claims in a catastrophe area.

Being the cause of something produced or something happening. An important doctrine in fields of negligence and criminal law.

v. To bring about.

n. Something that precedes and brings about an effect or a result. A ground of a legal action.

Cause Of Action
The fact or facts which give a person a right to judicial relief.

Cause Of Injury
That which produces injury.

To give notice of danger.

Careful in face of danger or risk.

Warning to person to exercise care.

Caveat Emptor
Let the buyer beware. This maxim is generally applied to judicial sales, auctions and the like as opposed to sales of consumer goods where consumers are protected by strict liability, warranty and other consumer protection laws.

To yield up or surrender, e.g. an insurer cedes part of a risk to a reinsurer.

Ceding Company
The insurer placing reinsurance with another company is the ceding company.

Centrifugal Force
Refers to the inertia of a body that tends to move it away from the centre around which it revolves.

In law, capable of being identified from data already given; free from doubt.


In insurance, the document indicating existence of a master policy and the participation of an individual insured, e.g. employer may retain medical expense policy while each employee possesses a certificate.

Certificate Of Authority
Document supplied by insurance company to its agent indicating what authority it is conferring on him. Usually accomplished through an agency agreement.

Certificate Of Incorporation
The basic document by which a corporation is formed under general corporation statutes. See Articles Of Incorporation.

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

Certificate Of Reinsurance
Written document evidencing reinsurance is in effect.

Certified Cheque
Cheque that is warranted by the bank that sufficient funds are on deposit and have been set aside. Bank is liable to pay such amount to proper party.

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.

The act of ceding. When one transfers property to another.

Cession Of Goods
When one finds himself unable to pay his debts, the relinquishment of all his property to his creditors.

To call or put in question.

Unexpected. The opposite of intention. See Act of God.

n. Alteration, modification or addition.

v. Alter, make different.

An individual’s moral qualities that distinguish him from others. While “character” and “reputation” are often used synonymously, they are different in that “character” is what a man is, and “reputation” is what people believe he is.

v. Hire, rent or lease for a temporary use.

n. The authority by virtue of which an organized body acts. In respect of a cor-poration, refers to certain rights, liberties or powers given to it under contract between the state and the corporation, between the corporation and the stockholders, and between the stockholders and the state.

The contract evidencing the agreement of a shipowner to lease his vessel to another person or firm for the conveyance of goods.

Property other than real property.

Chattel Lien
For benefit of those who expend labour, skill or materials on any chattel or furnishing storage thereof at request of owner, his agent, reputed owner, or lawful possessor. See Artisan’s Lien.

Chemical Still Operator’s Bond
Excise Bond guaranteeing that the Excise Act will be complied with, that proper accounting will be performed, and that duties and penalties will be paid.

A bank draft promising to pay a certain amount of money to the payee. It is signed by the maker and is payable on demand.

Child in law
Offspring of parentage; unborn or recently born human being. At common law one who had not attained the age of fourteen years, though the meaning now varies in different statutes.

Usually used before a date when the exact time is not known; e.g. circa 1900.

Regarding private rights and remedies sought by civil actions as distinguished from criminal proceedings.

Civil Action
Generally, all kinds of actions except criminal proceedings. Normally brought to enforce, redress, or protect private rights.

Civil And Criminal Courts
Civil courts adjudicate controversies between individual parties; criminal courts administer criminal laws, and mete out punishment.

Civil Arrest
Apprehending a person by virtue of a lawful authority to answer the demand against him in a civil action.

Civil Authority
In insurance, has been defined to mean “any person acting under the authority of the Governor General in Council of Canada or the Lieutenant Governor in Council of a Province, and/or any person acting with authority under a Federal, Provincial or Territorial legislation with respect to the protection of persons and property in the event of an emergency.” (Mass Evacuation Endorsement, IBC 11361/89).

Civil Code
The civil law of the province of Quebec which embodies the civil law of France.

Civil Commotion
A wild and irregular action of many people assembled together.

Civil Conspiracy
Joint attempt to defraud or cause injury to person or property, which results in damage to the plaintiff.

Civil Disorder
Any public disturbance involving three or more persons causing acts of violence which result in damage or injury or threat of damage or injury to others.

Civil Injury
Any injury to person or property which may be redressed by means of a civil action.

Civil Jury
Trial Civil action trial conducted before a jury instead of a judge.

Civil Law
The body of law concerned with civil or private rights and remedies, as contrasted with criminal law which deals with wrongs against society.

Civil Liability
Being amenable to civil action rather than to criminal prosecution.

Civil Nuisance
Anything done to hurt or annoyance of lands, tenements, or hereditaments of others.

Civil Offense
Violation of a statute making the act a public nuisance.

A demand by an individual or corporation to recover under a policy of insurance for loss which may come within that policy or may be a demand by an individual against an insured for damages caused by an event covered by a policy held by him. It frequently refers to the amount of the claim.

Claim Adjuster
Employee of insurance company or independent person or firm who negotiates and settles claims against the insurance company.

Claim Agent
In marine insurance, a person authorized to survey and certify losses, but does not have the authority to pay such losses.

Claim Expense
Expenses incurred, other than salaries or other remuneration paid, while working on a claim and which are normally charged to that claim.

Claim Reserve
Amount of money set aside by an insurance company for reported but unpaid claims and incurred but not reported claims, including claim expenses.

One who makes a claim.

Claims Examiner
Insurer’s employee designated to handle incoming claims.

Claims Made Basis
Provision in some contracts of insurance and reinsurance covering only claims made during term of the contract.

A group of persons or things sharing common characteristics.

Class Action
Means by which one or more of a large group of persons interested in a single matter may sue or be sued as representatives of the class without needing to join every member of the class.

Arrangement into groups according to established criteria.

Classification of Risks
In fire insurance, the term used to designate the nature and situation of the insured articles, and in accident insurance to the occupation of the applicant.

Term used to identify a particular part of a policy or endorsement.

Clean Bill
Bill of lading which does not contain any notation that qualifies the words of the bill of lading itself, i.e., signifies that the goods were received by the carrier in good condition.

Clean Bill Of Lading
A bill of lading on which the carrier has made no indication of any problems with the condition of the cargo at the time of acceptance for carriage.

Free from encumbrance, obstruction, burden or limitation.

Clear Market Value
See Fair Market Value.

Clear Space
(Detachment) Generally, in commercial property insurance policies, means the distance between the insured building or building containing the property insured from other commercially rated exposures.

Clear Title
Title free from encumbrance, obstruction, burden or limitation.

In maritime law, the right of a ship to leave port.

Client Satisfaction
The result of the emphasis on internal service quality and employee satisfaction.

Closed Insurance Policy
An insurance contract in which the terms and rates cannot be changed.

A group of brokerages who have band together or cluster, to share “back room” services such as processing and technology.

More than one person being sued in the same litigation.

Fiduciary serving jointly with another.

Two or more persons who own property.

Two or more sureties to the same obligation.

Coaching is a planned, methodological process performed by a manger to introduce and train an employee or to help improve the performance of an employee regardless of their level of experience or expertise.

Coastal Waters
In inland marine insurance, the waters of bays and inlets, as well as of the sea, along a coast.

A number or other symbol possessing a meaning, e.g. type and class of business, age of drivers and other information are set down in general classifications which are reduced to an identifying code number.

Code Civil
The code which embodies the civil law of France.

Compelled to comply.

Actual or implied compulsion to do what one’s free will would refuse.

Faculty of knowing, perceiving, conceiving, as opposed to emotion and volition.

To live together as husband and wife.

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

Person insured by property policy who suffers a coinsurance penalty and who, consequently, bears a part of the loss himself. Hence, a coinsurer.

Working together on a joint endeavour.

Falling in of a building.

(a) Property which is pledged as guarantee that a debt will be repaid. (b) Security such as cash or mortgages given to a surety to induce it to issue a bond which it would not otherwise issue.

Collateral Guaranty
Whereby the guarantor agrees to pay damages in the event the principal fails to do what he has promised.

Collateral Loan
Loan secured by pledge of specific property.

Collateral Security Agreement, Collateral Receipt
Contract between surety and party depositing collateral giving the surety the right to reimburse itself by cashing the collateral in the event of a loss under the bond.

Collateral Sources Doctrine
Doctrine providing that any compensation received by an injured plaintiff from a source independent of the wrongdoer will not reduce or mitigate damages he is otherwise entitled to recover.

To clash. See Collision.

An impact or sudden contact of a moving body with an obstruction, whether moving or stationary. In marine insurance, physical impact between two or more ships or vessels.

Collision Of The Load
Some insurance policies which insure merchandise in transit by motor truck stipulate that collision damage to the merchandise is covered only if the vehicle itself collides with something.

An agreement between two or more persons to secretly defraud another.

Collusive Loss
Loss caused by dishonest employees acting together.

Combination Plan Reinsurance
Quota share and excess loss reinsurance indemnifying ceding company for amount of loss on each risk a defined retention, subject to a defined limit and, (b) fixed quote share percent of remaining losses, excluding excess recoveries on each risk.

Combined Ratio
The total of the expense ratio and loss ratio an insurer over a specified period of time.

Coming To Rest Doctrine
In automobile liability policies, with respect to loading and unloading clauses, coverage ceases when goods have actually come to rest and every connection of motor vehicle with respect to unloading has ceased.

To authoritatively direct.

To start.

The buying, selling and exchanging of goods.

Relates to business and commerce.

Commercial Blanket Bond
Bond issued for a fixed amount which protects an employer against loss through dishonest acts of his employees.

Commercial Broker
One who, without having possession or control of it, negotiates the sale of merchandise.

Commercial Frustration
If contract is rendered impossible by act of God, law, or other party, excuse of party from performance of such contract.

Commercial General Liability Policy
Policy which provides broad coverage for claims made against insured for bodily injury or damage to property of others for which he may become liable and which arise out of his business operations.

Commercial Impracticability
Either party to a contract can be excused from performing the contract if three conditions are present: (1) a contingency must occur, (2) performance must thereby be made “impracticable,” and (3) the nonoccurrence of the contingency must have been a basic assumption on which the contract was made.

Commercial Insolvency
When a business person is unable to pay debts as they become due.

Commercial Insurance
Insurance policies designed to insure exposures of a business.

Commercial Invoice
Document issued by the seller to the buyer which gives details of merchandise sold, number of units being shipped, per unit cost and the terms of sale.

Commercial Motor Vehicle
Vehicles used primarily for business and industry.

Commercial Property Floater
A form of insurance which covers business property which is required to be moved from place to place. Usually written on special forms suited to the particular need such as contractor’s equipment floater, inland marine block policy, etc.

Commercial Property Insurance
Policy designed to insure real and personal property of a business.

Commingling of Funds
Combining funds of a fiduciary with those of his client or employer, generally considered to be a breach of his fiduciary relationship.

Compensation based on percentage of the amount of all transactions or on the profit to the principal.

Commission Merchant
One who receives and sells goods for a commission.

Commission of Authority
Written document which sets out the powers that a company grants to its agent

Shared equally by more than one. Happening often.

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.

Common Carrier
Includes airlines railroads, trucking companies and others that, for compensation, furnish transportation to any member of the public seeking their services.

Common Carrier
Those who transport persons or goods of all persons without distinction.

Common Good
Generally refers to the betterment of the general public.

Common Hazards
Certain hazards or conditions common to all buildings which influence their potential for loss.

Common Law
The common law comprises the body of principles and rules of action which derive their authority from the universal consent and practice of the people over the years. Distinguished from law created by the enactment of legislatures. Opposite to statutory and criminal.

Common Law Liability
Obligation established under common law, breach of which may require compensation.

Common Nuisance
A nuisance which affects the rights enjoyed by all citizens.

Common Or Ordinary Diligence
Degree of diligence which persons in general exercise in respect to their own concerns.

Common Property
(a) Property held by two or more persons in common with each other. (b) Portion of rented premises over which landlord retains control but which is used by tenants.

Common Right
The rights and privileges enjoyed equally by all citizens.

Common Wall
Wall shared by two contiguous structures.

Common-Law Marriage
Either of two persons who are living together in a conjugal relationship outside marriage and have so lived together continuously for a period of three years or, if they are natural or adoptive parents of a child, for a period of one year.

Commutation Clause
In reinsurance, provides for the estimation, payment and discharge of obligations for reinsurance losses.

Comparative Negligence
Whereby negligence is measured in terms of percentage, and awarded damages are diminished in proportion to amount of negligence attributed to the person seeking such damages.

That which is necessary to make good the loss a person has suffered. Also commonly used to refer to remuneration for services rendered.

Compensatory Damages
Intended to compensate the injured party for the injury sustained, and nothing more.

Compensatory Damages
See Damages.

Regarding contracts, of legal age . with no mental disability.

Possessing sufficient ability or authority; qualified; has the required natural or legal qualifications.

One who files a complaint with the courts.

The initial pleading by which a legal action is begun.

To finish.

Completed Contract Method
A method of accounting which reports gross income and expenses in the tax year in which the contract is completed.

Completed Operations Insurance
Coverage for injuries or damage, excluding damage to completed work itself, occurring after an operation is completed, but attributed to that operation.

Completed Value Insurance
Coverage, amount of which is derived from contract amount and which is adjusted to final insurable cost on project’s completion.

Completing Contractor
Contractor who completes project supported by surety because original contractor defaulted.


State of being an accomplice in a crime.

Act in accordance with.

Composition Roof
A roof that is made of usual roofing materials such as asphalt shingles, asbestos shingles or tar paper roofing. Term does not refer to non-combustible slate roofs, tile roofs, metal roofs, or wood shingle roofs.

Comprehensive Automobile Coverage
Physical damage coverage option for automobiles which insures against loss or damage resulting from numerous causes including fire, theft, windstorm, flood and vandalism. Loss by collision or upset is usually specifically excluded.

Comprehensive Dishonesty, Disappearance and Destruction Policy
Frequently called a 3-D Policy, a broad form of blanket Fidelity Bond extended to cover other allied risks such as burglary, forgery etc.

Comprehensive Personal Liability
Policy which provides broad coverages for claims made against insured for bodily injury or damage to property of others for which he may become liable and which arise out of non-business related activities. Liability arising out of the use of automobiles is specifically excluded.

To include, contain.

Compromise And Settlement
Where two or more persons agree to refer their legal dispute to decision of a designated third person, called an “umpire” or “arbitrator.”

Compulsory Insurance
Any form of insurance which is required by law, e.g. motor vehicle liability coverage which is required in all provinces, Workers’ Compensation Insurance which must be in effect before certain workers may be hired.

Computer/Data Processing (EDP) Floater
Computers and other Electronic Data Processing and Media, may be covered with this floater. Covered items include data processing equipment, data processing media (diskettes, tapes, software), and reproduction of data, extra expenses and loss of income due to the loss of use of the computer system and its effect on your income.

Withholding knowledge from others; to prevent discovery of.

The withholding of facts materially affecting an insurance risk or loss.

To pertain to; be of interest to.

When one acts with another to bring about a preconceived result.

Settlement of a dispute in a friendly manner. Used in labour disputes prior to arbitration.


Conclusive Evidence
Strong and conclusive evidence that does not permit contradiction.

Concomitant Actions
Civil actions which are brought together generally for some type of relief.

To agree.

Agreement; a meeting of minds.

Running together or contributing to the same event.

Concurrent Causes
Those causes which act together so as to cause injury or damage which would not have resulted in the absence of either. Two distinct causes, operating simultaneously, to produce a given result.

Concurrent Insurance
Two or more insurance policies, with the same conditions which cover the same interest in identical property, are concurrent. Also applicable where two bonds, not necessarily identical in their provision, provide common coverage for the same interests.

Concurrent Liens
Two or more liens on the same property which possess the same priority.

Concurrent Negligence
Negligence of two or more persons which produces a single injury.

Concurrent Tortfeasors
Those whose negligent acts combined to injure a third party.

Concurring Opinion
An opinion of one or more judges which agrees with the decision of the majority of the court but offers independent reasons for reaching that decision.

A condition imposed upon insureds under the policy requires them to do or not to do something during the term of the policy.

That which is dependent upon or granted subject to a condition.

Conditional Promise
In law of contracts, a promise to perform based on condition.

Conditional Sale Contract
Contract for sale in which seller reserves title until buyer pays for goods.

Conditional Sales Floater
Inland marine form of insurance which insures property which has been sold conditionally or on an installment payment plan.

Conditions Of The Contract
Contract’s articles defining terms and responsibilities of all parties.

System of separate ownership of individual units in multiple- unit building, together with a percentage interest in that part of the total property owned jointly by all unit owners.

The forgiving of an offence, especially by ignoring or overlooking it.

v. To manage; do business.

n. Personal behaviour.

Channel or pipe carrying fluids. Tubing carrying and protecting electrical wires.

Information entrusted to the broker to be kept in the strictest of confidence.

Shut in or imprisoned.

The governments seizure of property for public use.

Unusually large fire. Fires dealing with two or more risks or extending over large area.

Conflagration Area
Area that has suffered a conflagration or, because of its physical makeup, may be subject to a conflagration.

Goods or conduct which are in accordance with the obligations under the contract.

In civil law, a blending or intermingling

Confusion Of Goods
When goods belonging to two or more owners become intermixed so they can no longer be recognized as belonging to any one owner.

To join or fasten together.

A voluntary blindness; intentional failure to discover or prevent the wrong; passive consent.

Is the inner awareness of right and wrong and the sense .of personal integrity.

Succeeding one another in regular order.

Voluntary agreement by a person who possesses sufficient mental capacity to make an intelligent choice.

Consent Of Surety
Written undertaking by surety guaranteeing the owner that the surety is agreeable to issuing such bonds as are specified to ensure the performance of the contract if the contractor’s bid is accepted and he has entered into a contract with the owner.

The result of an event.

Consequential Damages
Such damage, loss or injury as does not flow directly and immediately from the act of the party, but only from some of the consequences or results of such act.

Consequential Loss
A loss not directly caused by damage to property but which arises as a result of such damage, as in the case of food spoilage from refrigeration failure resulting from fire damage to refrigerator.

To save and protect from loss or damage.

The reason a party will enter into a contract. An essential part of a binding contract. Can be either expressed or implied. Whatever is being paid for the article or contract is called “the consideration.”

Hand over or deliver to. To give in trust. To entrust with another to be sold, disposed of, or called for.

One to whom a consignment is made. Person or firm to whom cargo is shipped.

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

Consignment Bond
Bond guaranteeing return of consigned property if not sold, or if sold, a proper accounting of proceeds.

Consignment Contract
Agreement that consignee will pay consignor for any sold goods and will return any goods unsold. A bailment for sale.

Shipper of goods. Person named in bill of lading as one from whom the goods have been received for shipment.

When two or more persons join to perform an unlawful or criminal act.

Engage in conspiracy.

Being restricted.

To build. Different from “mainin”, which means to preserve.

Creation of something new as distinguished from the repair or improvement of something already existing.

Construction Contract
Contract in which construction plans and specifications are part of the contract itself. Commonly secured by performance and payment bonds.

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.

Constructive Total Loss
In marine insurance, one which occurs when the cost of salvaging the vessel or insured property is too high relative to the value saved.

To put together.

Individuals who buy products and services.

Consumer Protection Bond
License bond which protects the general public against fraudulent acts and misrepresentation of direct sellers, travel agents, auto dealers, collection agents, etc.

Mixing with or coming into contact with a foreign substance to cause a state of impurity.

Disobedience or a willful disregard of a public authority.

Contents Rate
Referring to the insurance rate on the contents of a building rather than on the building itself.

v. To defend an adverse claim in a court of law. To litigate.

Parts of the text in a statute, contract, will, etc., which immediately precede and follow it.

Adjoining or neighbouring. Continental Relating to a continent.

An event which may occur, the possibility of coming to pass.

Contingency Contract
A contract which is dependent on the happening of a contingency.

Contingency Insurance (Seller’s Insurance)
A secondary insurance coverage which will protect an insured’s financial interest if the primary insurance coverage effected by others does not respond for a covered loss.

Contingency Reserve
Money set aside to cover possible liability.

Contingent Business Interruption Insurance
Provides coverage for loss due to interruption of business by insured peril occurring at another’s premises, e.g., supplier or large customer.

Contingent Commission
Commission paid to agent which depends upon the profit the insurer has realized from his business.

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

Contingent Liability
The liability imposed upon an individual, corporation or partnership because of accidents caused by persons other than employees for whose acts the first party may be responsible.

Continuation Certificate
Notice of a bond’s or policy’s renewal or premium payment

Continuing Damages
Such as accrue from the same injury or from the repetition of similar acts between two identified time periods.

Continuing Professional Development
A formal procedure by which a professional body ensures that its members keep their expertise up to date with current developments.

Continuing Trespass
A permanent invasion of the rights of another, e.g., erecting a building which overhangs onto the property of another.

Uninterrupted; unbroken.

Opposite to.

Contra Proferentem
Against the party who proffers or puts forward a thing.

Contra Proferentem
A legal term which provides that any ambiguity in a contract be interpreted against the person who drew the contract since he was the one who selected the language.

Property which is unlawful to produce or possess.

An agreement between two or more persons which is enforceable at law, which creates an obligation to do or not to do a particular thing.

Contract Bond
In general terms, a surety bond guaranteeing the performance of a contract.

Contract Carrier
A carrier that carries, for pay, the goods of certain customers only as contrasted to a common carrier which carries the goods of the public in general.

Contract Documents
All documents relating to a contract including agreement, addenda, supporting documents, general conditions, supplementary conditions, specifications, drawings and modifications.

Contract Law
Is a voluntary exchange of promises obliging each party to an action or to refrain from an action.

Contract Not To Compete
Employee’s agreement not to compete with his employer for a stated period of time and within a specific geographical area after he leaves his employ. Such contracts are enforceable if the time span and area are reasonable.

Contract Of Affreightment
Contract for hiring a vessel.

Contract Of Insurance
A contract wherein one party, for a consideration known as a premium, assumes a risk of loss or liability that rests upon the other.

Commonly refers to one who, for a price, provides work or a service, or furnishes goods for the public, a company, or an individual.

Contractor’s Equipment Floater
Policy which insures against loss or damage to moveable equipment and tools of contractor.

Contractor’s Liability Insurance
Protection for contractor from defined liability claims arising from his operations.

Contractor’s Protective Liability
Liability insurance protecting the contractor in the event of claims resulting from operations conducted on his behalf by independent contractors or subcontractors.

Contractor’s Questionnaire
Surety’s detailed form which contractor completes to enable surety to decide whether or not to bond the contractor.

Contractual Liability
Liability assumed in a contract or agreement

Contractual Obligation
The obligation arising from a contract

Contractual Transfer
A means of generating funds from outside the business to pay for losses. An organization may shift its legal and financial responsibility for loss from an asset or particular activity to others by way of contractual transfer.



Contrary To Law
Against the law.

Contributing Cause
Factor which contributes to a result.

Contributing Negligence
Is where the plaintiffs action contributed to the loss.

Contributing Property One
upon which the insured is dependent for materials or goods.

The sharing of a loss or payment among several.

Contribution Clause
Provides where more than one policy in effect, insurers shall share such loss proportionally in accordance with their policy limits.

Contributory Negligence
Conduct by plaintiff which is a contributing cause which cooperates with the defendant’s negligence in causing the plaintiffs harm.

Contributory Negligence
Conduct by plaintiff which is a contributing cause which cooperates with the defendant’s negligence in causing the plaintiffs harm.

Contributory Value
In marine insurance, the value of property saved as a result of a General Average Act which forms the basis for determining each party’s contribution in General Average.

Device which has been arranged to deceive.

v. To regulate.

n. Power or authority to regulate.


Form of theft which includes any unauthorized act which deprives an owner of his property permanently or for an indefinite time.

Deliver or transfer to another

Act together toward a common end.

Cooperation Clause
Provision which requires the insured to cooperate with the insurer in defense of a claim.

Corporation or association which renders economic services to shareholders or members who own and control it, without gain to itself.

Reproduction of an original.

The right of literary property recognized by law, whereby the originator of the work or production is invested for a limited time with the sole and exclusive privilege of multiplying copies of the same and publishing and selling them. Works of authorship include (a) literary works; (b) musical works; (c) dramatic works; (d) dance works; (e) pictorial, graphic, and sculptural works; (f) motion pictures and other audiovisual works; and (g) sound recordings. Copyright protection for an original work of authorship does not extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

A secondary consequence.

Corporal Punishment
Physical punishment.

Corporal Touch
Physical contact.

Belonging to a corporation.

Corporate Agent
Person or a corporation who is authorized to act for a corporation.

Corporate Charter
Document issued by jurisdiction granting legal existence and right to function as a corporation.

Corporate Name
Legal name under which a corporation may sue or be sued and do all legal acts.

Corporate Officers
Officials of the corporation.

Corporate Surety
Surety or insurance company licensed to conduct surety business.

An artificial person or legal entity composed of numerous individuals. Legally vested with the capacity of continuous succession, and of acting as a unit or single individual in matters relating to the common purpose of the association, within the scope of the powers and authorities conferred upon such bodies by law.

Corrected Policy
Policy issued to correct misstatements in initial policy.

To add credibility by additional and confirming facts or evidence.

Expense or price.

Cost And Freight (C.A.F.)
Sales price includes cost of goods and freight.

A payment made to successful party, and recoverable from the losing party, for his expenses in prosecuting or defending an action.

Costs Bond
Bond guaranteeing payment of court costs in event of judgment against party providing bond; also may be required of an appealing party in a civil case.

Costs, Insurance And Freight (C.I.F.)
Sales price which includes cost of goods, freight and insurance.

Count Bill of Lading
Bill of lading which shows the actual number of units being shipped.

Counter Claim
Whereby in the same law suit the defendant files a counter claim in opposition to or deduction from the claim of the plaintiff. Both claim and counter claim are heard at the same time.

Counter Offer
Whereby the offeree rejects the offer and proposes a new offer to the offeror.

Counter Replevin Bond
Bond guaranteeing costs and damages in connection with replevin proceedings.

In insurance policy, signature of agent which authenticates facsimile printed signature of a company officer.

To make a copy without authority or right and with a view to deceive or defraud by passing such copy as original or genuine.

Country Damage
In marine insurance, damage caused by dirt, mud, etc., to commodities before they are shipped.

Course Of Business
That which is normally done in the management of business.

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.

Course Of The Voyage
The regular, customary and shortest way which a ship takes in going from one port to another.

Course Of Trade
That which is ordinarily done in the management of business.

A government organ which applies the law and where justice is administered.

Court Of Competent Jurisdiction
One having jurisdiction under the Constitution and/or laws to determine the question in controversy.

Court of King’s (or Queen’s) Bench
In English law, the supreme court of common law in the kingdom.

Court Of Probate
A court having jurisdiction over the probate of wills, the grant of administration, and the supervision of the management and settlement of the estates of decedents.

Court System
The network of courts in a particular jurisdiction.

A written agreement wherein one party pledges to do something or to abstain from doing something.

Covenant Of Quiet Enjoyment
When inserted in lease, a promise that the tenant shall enjoy the premises in peace and without disturbance.

Protect with insurance.

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.

Amount and extent of risk covered by insurer.

Credit Card Loss Insurance
Covers against loss stemming from the misuse of lost or misappropriated credit cards.

Credit Check
checking the credit rating of those clients requesting credit terms.

Credit Insurance
Policy which indemnifies the insured against failure to collect money due him as a result of death, disability, bankruptcy or insolvency of persons to whom credit is extended.

Credit Report
Report provided by a commercial credit reporting company which provides details on the reputation and financial strength of an individual or corporation.

Credit Union
Cooperative association that accepts deposits from a closed group of persons (e.g. fellow employees) and lends it out again to persons in the same group.

A person to whom a debt is owed.

An act which is illegal.

n. One who has been convicted of a crime.

Criminal Charge
An accusation of crime which results in a prosecution.

Criminal Gross Negligence
Gross negligence is culpable or criminal when accompanied by acts of commission or omission of a wanton or willful nature, showing a reckless or indifferent disregard of the rights of others, under circumstances reasonably calculated to produce injury, or which make it not improbable that injury will be occasioned, and the offender knows or is charged with knowledge of the probable result of his acts; “culpable” meaning deserving of blame or censure.

Criminal Law
The body of law which for the purpose of preventing harm to society, (a) declares what conduct is criminal, and (b) prescribes the punishment to be imposed for such conduct. It includes the definition of specific offenses and general principles of liability. Substantive criminal laws are commonly codified into criminal or penal codes.

Criminal Negligence
The failure to use the degree of care required to avoid criminal consequences.

Critical Illness Policy
A policy that provides a lump sum payment to the insured should he/she be diagnosed as having one of a number of specific illnesses, conditions or diseases.

Critical Success Factors
Key elements, at which the brokerages will need to excel to ensure the successful development and implementation of a dient relationship management strategy.

Cromie Rule
One of several rules used by adjusters to apportion losses between non-concurrent policies.

Crop Insurance
Insures against loss due to the failure of crops to produce properly. Extends beyond crop-hail insurance to insure loss due to drought, frost, etc.

Crop-Hail Insurance
Insures financial loss due to destruction of growing crops by hail and other perils such as fire, windstorm, lightning, etc.

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

Crown Lands
Lands belonging to the government or nation.

To compress between two hard bodies.

Civil law term meaning fault, neglect, or negligence.



One accused or charged with a crime.

Forming an aggregate; two things to be added together.

Coins and paper money authorized by law which circulates as the medium of exchange.

Current Assets
Assets that can be quickly converted to cash, usually within a one year period.

Current Assets
All property that is readily convertible into cash, such as accounts receivable, notes, and securities.

Current Liabilities Debts
whose payment is expected to occur within one year.

Current Market Value
The price an article will fetch on the open market.

Current Ratio
Ratio of current assets to current liabilities.

Normally includes the insured, any partner, orany employee authorized by the insured to have the care and custody of the insured property.

The care and control of a thing or person.

Custom And Usage
A practice which, because of common adoption and long habit, has become compulsory and has acquired the force of a law.

Custom Duties
Tax assessed on the importation and exportation of merchandise.

Custom Farming
Use of insured’s farm machinery or equipment for others away from insured’s farm premises for compensation. It does not include work done for others in return for work done by them.

According to usage.

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

Customs Broker
Generally, person whose function it is to handle the process of clearing goods through customs. I n marine insurance, firm which specializes in clearing imported merchandise for transit to the interior. Normally responsible for obtaining and submitting all documents for clearing merchandise through customs and arranging inland transport as well as paying all charges related to these functions.

Customs Entry Form
A form required by Canada Customs for all merchandise entering Canada. It indicates country of origin, description of merchandise and amount of estimated duty to be paid before merchandise is released by customs.

Provision in reinsurance contract stating that reinsurer is not liable for losses occurring after date of termination.


Daily Report (D. R.)
An abbreviated copy of pertinent policy information, identical copies of which are usually prepared so that the insurance company’s home office, branch office, and agents may each have one.

An amount of money awarded to the person injured by another’s tort.

Unsafe; hazardous.

Dangerous Occupation
Hazardous work.

Dangers Of The Sea
Those accidents peculiar to navigation that are of an extraordinary nature which cannot be guarded against by the ordinary exertions of man.

Generally, organized information collected for a specific purpose. In electronic data processing insurance policies, can mean the information stored on the media, including customized and packaged computer programs, and the instructions or operating systems employed to make the programs work.

A database is a collection of information about current and prospective clients that is usually stored in computer files that are accessible to various personnel within the organization.

Date Of Injury
The date of the occurrence or accident causing such injury.

De Facto
In fact; indeed; actually

Dead End Main
The last fire plug on a water main which is subject to a greater risk of clogging and some drop in water pressure. Considered by underwriters on fire risks.

Death Benefit
Amount indicated in policy representing amount that will be paid in the event of death, also referred to as “principal sum”.

Debris Removal
Provision commonly found in property insurance policy providing coverage for cost of debris removal after an insured loss.

Sum of money owed to one person from another.

One who owes a debt Anyone liable on a claim.

A fraudulent misrepresentation intended to deceive or trick another who is ignorant of the true facts.

Intentional misleading by spoken or acted falsehood. Synonymous with fraud.

Deceptive Sales Practices
Use of some measure of deceit in sale of goods or services.

Concrete floor or roof slab or form for a concrete floor or roof slab.

Portion of insurance policy containing the information regarding the risk, on the basis of which the policy is issued. In marine insurance, form used by insured in reporting shipments under an Open Cargo Policy when no evidence of insurance is required. Also, statement signed by insured warranting that information given by him is true.

Statements included in policy which are agreed to by the insured and form the basis of the contract of insurance.

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

Declining Balance Method
The annual depreciation allowance is found by multiplying the undepreciated cost of the asset each year by a uniform rate up to double the straightline rate or 150 percent, as the case may be.

Decreasing Term Insurance
Temporary life insurance in which the amount payable on the death of the insured reduces yearly according to a predetermined formula.

Judgment or order of the court.

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.

Deductible Clause
A clause providing that insured will pay first part of any insured loss, with the balance being paid by the insurer.

Deduction For New
In marine insurance, an amount credited to the insurers on the cost of repairing a vessel for damage arising from the perils of the sea insured against. Usually one-third, made on the theory that parts restored with new materials are better in that proportion than they were before the loss.

A writing signed by grantor, whereby title to real property is transferred from one to another.

To believe; treat as if; construe.

A statement that causes unjustified injury to the reputation of another person and which results in the loss to that person of the esteem, confidence, respect and goodwill of a considerable part of the community. Includes both libel and slander; may be criminal as well as civil.

Failure to abide by the terms of an undertaking or contract.

A deficiency in something essential to the proper use for the purpose for which a thing is to be used.

Something is “defective” if it is not fit for the ordinary purposes for which it is sold and used.

Defective Condition
Something is in a defective condition when its use may cause physical harm which would not ordinarily be contemplated by the consumer.

Defective Work
Work not performed in compliance with contract documents.

Defence, Statement Of
Outlines which allegations made by the plaintiff in the statement of claim the defendant admits to be true, denies are true, or has no knowledge of because their validity is unknown to the defendant. May also include the defendant’s version of the facts.

To represent a defendant in a legal proceeding.

The person against whom a suit is commenced, ot the accused in a criminal case.

A defendant’s response to a plaintiff’s Statement of Claim in which he seeks to provide a reason(s) in law or fact why the plaintiff should not recover or establish what he seeks.

Deferred Premium Payment Plan
Plan which provides for payment of premium over a specified length of time.

An excess of expenditures over revenues.

To knowingly or recklessly make a misrepresentation of an existing material fact which is relied on by another to his damage.


One delegated to act in the stead of another.

To erase.

Wilfully, with premeditation.

Demographic Information
Categories most often used for marketing. (i.e. age, gender, family life cycle, education, occupation, religion, ethnic origin and income)

One who demonstrates in public to support and to enlist support for a cause.

In maritime law, the extended freight and amount payable for delays by receiver in loading or unloading cargo.

The belief that actions are morally right or wrong independent of their consequences.

Deposit Insurance
Coverage protecting bank depositors from loss resulting from bank failure.

Deposit Premium
The premium deposit required by the insurance company on those forms of insurance subject to periodical premium adjustment.

Depositor’s Forgery Bond
Coverage to a person or corporation to protect against losses by reason of forgery or alteration of any cheque, draft, etc.

Place where something is deposited or stored, e.g., bank, credit union.

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

Voluntary abandonment of goods by its owner.

Derivative Action
Lawsuit that permits other interested parties to take action on behalf of the corporation where those managing the affairs of the corporation have misused the assets.

Description of Risk
Particulars of a risk, e.g., construction, location, and occupancy of a building.

An act which renders the subject useless for its intended purpose.

Not joined to another structure on either side.

See Clear Space.

Keeping back or withholding a person or thing, whether done intentionally or not.

In a commodity, an impairment involving some degeneration in the substance of the thing, such as that arising from decay, corrosion, or disintegration.

Development Bond
Bond in favour of municipalities or others guaranteeing the financing and construction of infrastructures such as streets, sewers, etc.

A variance from the risks insured against, without necessity or just cause, after the risk has begun, which may void the liability of the insurer. In marine insurance, a vessel making a voluntary, unnecessary or unexcused departure without reasonable cause from the course of the voyage insured, or an unreasonable delay in pursuing the voyage, or taking

A scheme to trick or deceive.

To contrive or plan.

Difference In Conditions Insurance (DIC)
Policy designed to protect insured from catastrophic losses not covered by basic property coverage. The DIG was originally intended as a “gap filler” or as an “all risks” form providing coverage where more common basic property forms left off and reducing the chance of an uninsured loss. The DIG basically extends the “perils covered” and is not intended to provide coverage in excess of otherwise inadequate property limits.

Differential Advantage
Any feature, service or product offered by the brokerage which differentiates it from others and provides an advantage because clients deem it as being important to them.

Intended to cause delay.

Attentive and persistent in doing something.

The potential change in value of an item.

adj. Immediate or proximate.

Direct Action
Right of an injured third party to sue an insurer directly.

Direct Billing
Where by the insurance company directly bills the insured for payment of premium.

Direct Cause
That which sets in motion series of events, without the intervention of another, which brings about result

Direct Damages
Those that follow immediately upon the act done.

Direct Loss
One resulting immediately and proximately from the occurrence.

Direct Marketing
An interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location.

Direct or Held Covered
In marine insurance, a condition which requires the insured voyage to be direct from one place to another. If the voyage is delayed en route or if there is a deviation from the direct route, the insurance coverage continues subject to payment of an additional premium, but only if the assured gives prompt notice of the delay or deviation immediately on receipt of advices, unless the policy provides otherwise.

Direct Writer
Insurance company that sells direct to insured and not through intermediaries such as independent agents or brokers.

Direct Written Premium
Policy premium adjusted by additional or return premiums.

(a) A person who leads or controls; manager. (b) One of a group of persons chosen to direct the overall affairs of a company or institution.

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 incurred in defending lawsuits arising from such acts.

When used in conjunction with Accident and Sickness insurance, may include actual incapacity to perform usual tasks encountered in one’s employment and physical impairment that may or may not be incapacitating.

Disability Clause
Clause providing waiver of premiums during period of disability.

Disability Insurance
Coverage to protect insured during periods of inability to work.

Difference of opinion.

To release. Removal of obligation or liability.

Act of disclaiming, renunciation, disavowal.

Act of disclosing.

Reduction in rate or the premium for features which improve the risk or for when several coverages are incorporated into one policy.

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

Unfair treatment or denial of normal privileges to persons because of their race, age, nationality, gender, marital status, religion, etc.

Illness not arising from accident or injury.

Anything which impairs the beauty or appearance of a person or thing.

Lack of integrity.

Loss of a limb.

Riotous or turbulent behaviour.

Disorderly Conduct
Generally any illegal behaviour that tends to disturb the public peace, scandalize the community, or shock the public sense of morality.

Generally, completion or settlement with speed. In marine insurance, the use of proper speed in discharge of a cargo.

Exhibition for effect.

Subject of litigation. A conflict.

In purchases, consignments, or contracts for sale of consumer goods, one which stands between the manufacturer and the retail seller.

An act which causes annoyance to another, interrupts his peace, or interferes with his ability to pursue a lawful and appropriate occupation.

Disturbance Of Peace
Conduct which tends to annoy all good citizens and anyone present not favouring it.

To turn aside. Usually refers to watercourses or to the unauthorized use of funds.

A portion of a company’s profits paid to shareholders.

Division Wall
Wall that meets certain standards and which effectively separates a building into two separate fire areas.

Dock Receipt
In marine insurance, a form issued by a carrier or his representative as evidence that merchandise was in fact received by the carrier for shipment. Often referred to as a Receipt for Shipment Bill of Lading.

A principle, or tenet of the law.

Doctrine of Agency
Involves one person, the principal, appointing another person, the agent, to act on the principal’s behalf.

Doctrine of Assignment
Is a means by which the benefits of a contract can be granted to another person.

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

Doctrine of Negligence
Based on the duty of all persons to exercise due care in their conduct towards others for which injury may result.

Doctrine of Privity
Only the parties to a contract have any rights or obligations under the contract.

An official form of something which may be used as evidence.

n. A household servant.

adj. Relating to a home.

Domestic Animals
Animals that live in or about dwellings or contribute to the support of a family.

Domestic Company
A Canadian company.

Domestic Servant
Person hired primarily to perform household duties, maintain the home, and care for members of the household.

One’s permanent home and principal establishment and to which whenever he is absent he has the intention of returning.

Refers to merchandise shipped in containers, trailers or vans from the original point of manufacture to the final destination. Same as House to- House.

Double Indemnity
In life insurance contract, provision requiring payment of twice the face amount of the policy in the event of death by accidental means.

Double Insurance
Occurs when one is insured by several insurers separately in respect to the same subject and interest.

The period of time between damage and repair where an economic loss occurs.

An order to pay bearer in money, signed by a drawer and payable on demand or at a definite time.

n. A channel through which water flows off.

Drainage System
All pipes, public and private, conducting liquid wastes to a designated spot.

Dram Shop Act
laws which hold sellers of intoxicating liquors liable when a third party is injured by an intoxicated buyer where the sale has caused or contributed to such intoxication.

Drive-In Claims Service
Service provided by some insurers whereby damaged vehicle is driven to a drive-in claims office for adjustment of a loss.

Drive-It-Yourself Cars
More commonly termed rental or leased cars, furnished without drivers.

One who is actually doing driving.

Driver Training Credit
The premium rebate insurers grant to applicants for private passenger automobile insurance who have successfully completed an approved driver training program.

Driver’s Abstract
A record of the driver history of the applicant and other drivers which can be obtained from provincial licensing authorities.

Driver’s License
Provincially issued certificate which authorizes a person to operate a motor vehicle.

Driving While Intoxicated (DWI)
An offense committed by one who operates a motor vehicle while under the influence of intoxicating liquor or drugs.

Medicinal substance, used alone or as ingredient; narcotic, hullucinogen, or stimulant.

Intoxicated; deprived of proper control of oneself by alcoholic liquor.

Dry Valve
The valve which allows water into an automatic sprinkler system.

(a) Wall covered with wallboard. (b) Wall constructed of rock without mortar.

Dual Obligee
More than one obligee on a surety bond, e.g., two owners; owner and financial institution; owner and municipality.

Dual Purpose Doctrine
Whereby if, during the course of his work an employee is required to travel, he is in the course of his employment while doing that work even though at the same time he is serving some purpose of his own.

Reasonable, as in the phrases “due care,” “due process of law,” “due notice.”

Due And Proper Care
That care which is required of one for prevention of the accident. See Due Care.

Due And Reasonable Care
That care which a reasonably prudent person would exercise under same or similar circumstances. See Due Care.

Due Care
The absence of negligence. That care which an ordinarily prudent person would have exercised under the same or similar circumstances. “Due care,” “reasonable care,” and “ordinary care” are often used interchangeably.

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.

Due To
Caused by.

Dun & Bradstreet
Mercantile credit reporting company which supplies confidential information on businesses and their owners.

In risk management, the complete reproduction of the organization’s own standby asset or facility to be kept in reserve. This duplicate is not used unless the primary asset or activity is damaged or destroyed.

Any means used to coerce a person to act in a manner contrary to his free will.

After the beginning of and before the end of.

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.

Duty to Cooperate
In accepting and signing the insurance policy, the insured usually has agreed to follow its conditions. One of the most important duties of an insured is to cooperate. This duty is identified in Statutory Conditions, and in Conditions of most Commercial General Liability policies. Indeed, this condition is so critical insurers can cite a breach of this condition as a basis to deny a defense to an insured.

A structure used as a residence.


Earned Premium
The difference between premium paid by insured and the portion the insurance company must return to him if the policy is cancelled during its term; the amount of premium at anytime which pays for the coverage furnished by the insurance company during the expired portion of the policy term.

Earned Premium
The difference between premium paid by insured and the portion the insurance company must return to him if the policy is cancelled during its term; the amount of premium at anytime which pays for the coverage furnished by the insurance company during the expired portion of the policy term.

Earthquake Insurance
Coverage against damage by earthquake.

A right of persons to use land belonging to others, i.e., a right of way.

Economic Obsolescence
Loss of value of property due to economic developments, e.g., deterioration of neighbourhood.

Educational Institution
An educational establishment, e.g., school, seminary, college, university.

v. To bring about

n.Result, consequence.

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

Generally, personal property but can include real property.

Efficient Cause
That cause which produces effects or results.

Liquid waste including industrial wastes and sewage.

The way out.

The one or other of two alternatives.


An action to restore property to the person who is entitled to it.

Electronic Commerce Legislation
These laws permit electronic documents to be of the same force and effect as a paper document and electronic signatures to have the same binding legal effect as handwritten signatures.

Electronic Data Interchange (EDI)
Used by CSIO members as the preferred solution to transfer policy, claim, payment and related information between insurance brokerages and insurance companies.

Electronic Data Processing Policy (EDP)
Insurance policy normally covering physical loss to data processing system and equipment and data processing media, and extra expense.

Electronic Protection
Installation of electronic devices to help detect unauthorized access can be used to provide an effective means of perimeter protection.

Device used to move people and goods from one floor level to another.

Elevator Collision
Coverage for collision damage to elevator.

Elevator Liability Insurance
Covers against liability for bodily injury and property damage arising out of ownership, operation or use of an elevator.

Electronic correspondence sent between individuals over the Internet.

The fraudulent taking of money or property which has been entrusted to one’s care by reason of some office or employment or position of trust.

An unforeseen happening that calls for immediate action.

Emergency Doctrine
Under this doctrine, one is not held to the same degree of care for his actions when confronted with a sudden emergency requiring instinctive action, as he is when he has time for reflection. In a situation requiring medical assistance for an adult who is unable to give consent, or a child whose guardian is not immediately available, the law implies the consent required to administer emergency medical services.

Eminent Domain
State’s power to appropriate private property for public use.

A thing emitted, e.g., a pollutant from a factory.

Emotional Intelligence
Allows a person to pick up on the difference. The emotionally intelligent person understands the difference between what is said and how it is being said.

The ability to understand and appreciate another person’s frame of reference. The manner by which we demonstrate our appreciation and understanding of another’s position is by listening.

Use services of; hire.

One in the service of another, where the employer has the right to direct and control the employee as to how the work is to be performed.

Employee Benefit Plan
An incentive plan to reward employees for high levels of performance and loyalty.

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.

One who employs the services of 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.

Employers’ Liability Acts
Acts defining the extent to which employers shall be liable in damages for employees’ injuries occurring in the course of employment, e.g., Workers Compensation Act.

That activity which occupies one, normally on a day to day basis.

Employment Contract
Contract signed by employer and employee outlining terms and conditions of the employment.

Employment Standards Legislation
Enacted in all Canadian Provinces to impose minimum requirements or standards of employment as well as minimum responsibilities on employers.

Grant of authority.

Management’s ability to delegating responsibility and authority, in order to free themselves to take on responsibilities important to the brokerage as a whole.

Give power to do something.

Illegal intrusion in a highway or navigable river, which may or may not obstruct.

Any outside interest in or right to property founded on legal grounds, such as a mortgage, lien on work and materials, or a right of dower. It diminishes the interest of the person owning the property.

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.

Policy Form of life insurance that is combined with certain savings features.

Engaged In Employment
To be providing a service for the employer under terms of employment

To require a person, by writ of injunction, to perform or not perform some act.

Possess. Have benefit of.

To follow as a chance, likely or necessary consequence; to take place afterwards, e.g., fire occurring after earthquake.

An undertaking, usually involving financial commitment

Persuade someone to do a thing.

To deliver to another something in trust or to commit something to another with a certain confidence regarding his care, use or disposal of it.

All those circumstances and factors which affect the value of property and the quality of peoples’ lives.

Environmental Impairment Liability Insurance
Insurance to cover damage caused by pollution.

Generally, the articles needed in equipping.


Equitable Remedies
These remedies are only awarded by the courts where some special injustice is likely to result that cannot be addressed by damages.

Justice administered according to fairness as opposed to rules of common law.

Equity Ratio
Is a test of financial strength of special interest to long-term creditors. Because owners equity is total assets minus total liabilities, the higher the ratio is, the stronger the financial position of a brokerage will be.

The wearing away by the action of water, wind, or other elements.

Involving error.

Condition of erring in opinion or conduct.

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.

Escalation Clause
Contract provision allowing for adjustment in specific items if conditions change.

Property delivered into the hands of a third person, to be held until the happening of a contingency or performance of a condition, and then delivered by him to the original grantor, e.g., delivery of deed to escrow agent under instalment land sale contract until full payment for land is made.

Spying, usually in respect to national defense.

(a) Degree of interest one has in real and personal property. (b) Total property owned by a decedent prior to distribution.

Determining approximate cost.

Estimated Premium
Approximate cost of premium which will be increased or decreased when final premium calculation is made.

One who appraises value, worth or cost of items.

To stop, bar, or preclude.

“Estoppel” means that a party is prevented by his own act from claiming a right to the detriment of another party who was entitled to rely on such conduct and has acted accordingly, e.g., insurer is estopped from denying payment when has advised insured claim will be paid.

Ethical Egoism
Ethical Egoism holds that the consequences of an action are evaluated as right or wrong, solely in terms of their harm or benefit to the individual considering the action.

Ethical Realism
When an individual is confronted with ambiguity they prefer to look at an objective standard (such as a code of conduct or set of professional rules) to determine whether a course of action is ethical, instead of analyzing a somewhat ambiguous ethical model.

Relating to moral character. Conforming to professional standards of conduct.

An endeavour to elude truth or escape law’s punishment

Happening or occurrence. Different from an “act”, which is a product of the will, whereas an “event” is something that takes place independent of the will, e.g., earthquake or flood.

To recover something from a person by virtue of a court’s judgment or judicial sentence.

Depriving one of his possession of land or rental property which he has held or leased.

Those things offered to prove existence or non-existence of a fact

Ex Gratia Payment
Payment made by insurer who is not liable under terms of the policy, but is made in order to avoid greater expense, e.g., costs of a suit.

An investigation; search; inspection; interrogation.

Examination for Discovery
After documents are exchanged, each party to a lawsuit can be obligated to attend an examination for discovery, at which the parties will be asked to answer a series of questions orally, under oath and in the presence of a court reporter.

Examination Under Oath
The right given to insurers to require a policyholder to answer questions about a loss or claim after having been sworn.

(a) One who administers an examination. (b) Underwriter who studies individual risks for acceptability. (c) Insurance company employee who receives claims reports for approval of payment. (d) Government official who checks records of insurance company.

To dig out, leaving a hole.

Something which would not ordinarily apply, i.e., an exception excludes that which otherwise would be included.

That which goes beyond what is necessary. Also, degree or amount by which one thing or number exceeds another.

Excess Clause
Clause providing for insurer’s liability up to limits of policy covering excess loss only after other valid insurance has been exhausted.

Excess Insurance
Amount of insurance coverage which is beyond that of one insurer but which is required to pay a particular loss as distinguished from “other insurance” which may be used to pay or contribute to the loss. See also Excess policy.

Excess Liabilities
In marine insurance, insurance to cover the excess amount of liability for general average contributions, salvage charges, sue and labour charges and three fourths collision liability where the full amount is not covered by a hull policy.

Excess Liability Damages
Arise from an action against a liability carrier by an insured for the negligent handling of settlement negotiations which result in a judgment against the insured in excess of his policy limits.

Excess Limits Premium
Premium charged for excess liability coverages.

Excess Policy
One that provides that the insurer is liable only for the excess above and beyond that which may be collected on other insurance.

Excess Reinsurance
arrangement to cover losses over a specified amount.

Excessive Force
Unjustified amount of force.

A tax which includes various license fees and almost all taxes except income tax.

Excise Bond
Required under the Excise Act and Regulations guaranteeing compliance with the Act.

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

Exclusive Agency
Grant of exclusive right to sell within a specified market or area to agent.

Exclusive Agent
Agent who has exclusive right to sell within specified market or area.

Exculpatory Clause
Contract provision relieving one party of blame or negligence for his acts.

To carry out in accordance to its terms.

A person appointed by a testator in his will to administer his estate.

Executor De Bonis Non
Executor who replaces a previous executor.

Female executor.

Exemplary Damages
When wrong done to plaintiff is aggravated by violence, oppression, malice, fraud, or wanton and wicked conduct on the part of defendant, those damages awarded to plaintiff over and above what will barely compensate him for his property loss.

Way out

Expectancy Damages
Awarded for nonperformance of contract.

To hasten.

Expediting Charges
Cost to speed up the repair or replacement of destroyed or damaged property.

Expediting Costs
The extra costs incurred in hastening the recovery of a business after a loss.

Expediting Expenses
(Boiler & Machinery Policy) Includes: (a) the reasonable expenses arising out of making necessary temporary repairs to the damaged property, e.g., boiler. (b) Those expenses incurred in speeding up or expediting permanent repairs to such property.

To eject, generally implying the use of force (regarding trespass and other torts).

Expense Constant
The amount used to calculate a premium which represents the minimum cost of issuing and serving a policy. Usually applied to small risks.

Expense Loading
The part of a premium rate which represents the cost to the insurer of producing and maintaining the policy.

Expense Ratio
Proportion or ratio of expenses to income.

Experience Modification
Change of rate brought about by loss experience in a particular class of business.

Experience Rating
Method of determining rates by using the loss experience of insured over a period of time.

One whose education or personal experience makes him knowledgeable in a specialized field.

The date upon which a policy will terminate, unless previously cancelled.

Expiration Notice
Notice sent by insurer to broker/agent or one sent by broker/agent to insured that a policy is about to expire.

Taking unjust advantage of another for one’s own advantage or benefit.

An outburst of gas or compressed air, usually accompanied by a loud violent noise or report.

v. To send abroad.

n. Commodity which has been exported.

The state of being open or subject to loss from some hazard or contingency.

Exposure Theory
Under this theory, bodily injuries or property damages resulting from exposure to harm trigger the policies that were in place at or during the time of exposure.

Made known distinctly and explicitly.

Express Agreement
Whereby the terms and stipulations are specifically declared and ac-knowledged by the parties at the time of making the agreement.

Express Assent
That which is openly declared. Implied Assent. That which is presumed by law, and proved by conduct of the parties.

Express Authority
Authority given in direct terms which expressly authorizes agent to do a delegable act.

Express Authority
Authority that is given explicitly either in written form or orally.

Express Company
Business which transports parcels as common carriers.

Express Consent
Written or oral consent directly given.

Express Waiver
The voluntary, intentional relinquishment of a known right.

Express Warranties
In sale of goods, promises negotiated and specifically agreed to by parties to contract. n insurance contracts, an agreement stated therein that certain facts relating to the risk are true or shall be true, or certain acts have been or shall be done.

Stated or declared in direct terms.


Extended Coverage Clause
Clause which extends protection to hazards beyond those covered in the basic policy.

Extended Family
The dependent child, spouse, parent, guardian, brother, sister, and grandparent of the Insured Applicant or Spouse.

Extended Term Insurance
Form of life insurance that provides for continuation of the policy even if premium is not paid, so long as sufficient equity remains in the policy.

To obtain money or other valuable thing either by actual force, or by the force of motives applied to the will.

When property is obtained from another by wrongful use of actual or threatened force, violence, or fear, or under colour of official right.

Extra Expense Insurance
Covers the extra expense an insured incurs in carrying on a business following an insured loss.

Conditions of special and unusual danger.

Extraneous Evidence
Evidence that is not furnished by the document such as a contract, deed, or will, but is derived from outside sources.

Out of the ordinary.

Extraordinary Care
Highest degree of care.

Extraordinary Hazard
Hazard not commonly associated with a job or undertaking.

Extraordinary Risk
A risk arising out of conditions not usual in the business, and one which may be obviated by the exercise of reasonable care by the employer.

Outside the physical and juridical boundaries of a particular province or country.


In marine insurance, “Free of all average”, meaning that the insurance is against total loss only.

Free alongside. Sale price includes costs of transportation and delivery of the goods alongside the ship.

Fellow Canadian Institute of Actuaries.

Fellow of the Chartered Insurance Institute (British).

In marine insurance, “Free from general average.” See Average; General average contribution.

Fellow of the Insurance Institute of Canada.

Free on board some location, meaning the sale price includes delivery to that location.

F.P.A.A.C. Free Of Particular Average, American Conditions
In marine insurance, average clause which limits recovery of partial losses to those caused by fire, stranding, sinking or collision.

F.P.A.E.C. Free Of Particular Average, English Conditions
Same as FPAAC except that the partial losses referred to are recoverable if the vessel has stranded, sunk, burned, been on fire or in collision, regardless of whether such losses were actually caused by any of these perils.

Fellow of Society of Actuaries.

Face Amount
The policy amount which is the limit the insurer may be liable to pay in one loss.

Face Of Policy
The first or front page of the policy. Synonymous with Declaration(s), Declaration Page, or Coverage Summary page.

Face Value
The value indicated on the face of a security or insurance policy representing its value at maturity or death.

Facilitated ADR
Facilitated ADR occurs when a third party is called in to assist with the dispute resolution process.

Pooling agreement between all automobile insurers (now replaced in most provinces by the Facility Association) in which a market is guaranteed for all licensed drivers and registered owners. The results of the total industry pool are shared by all members of the agreement.

Facility Association
Similar to Facility in intent except that individual risks are written with selected carriers on behalf of the association, the collective results of which are then shared by all members of the association.

An exact copy.

Facsimile Signature
Signature reproduced by a mechanical or photographic process.

An actual occurrence.

Fact Finding ADR
Fact-finding ADR requires an investigation or inquiry.

One who is employed to sell merchandise consigned to him, and whohas it in his possession and control, and is remunerated by a commission. A factor is different from a “broker’ in that he is entrusted with the possession, management, and control of the goods while the broker acts as an intermediary without control or possession of the goods. A factor may buy and sell in his own name, as well as in that of the principal, while a broker cannot.

Factory Mutuals
Mutual insurance companies specializing in industrial risks and loss prevention.

Facultative Reinsurance
A type of reinsurance whereby the reinsurer has the option of accepting the tendered part of the original insurer’s risk.

Facultative Reinsurance
placed on an individual case basis.

Fair Market Value
Price at which property would change hands between a willing buyer 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 cash value, actual value, market value, fair cash market value, fair cash value, market value, reasonable market value, trust cash value, value.

Fair Rent
A rent which is reasonable.

Fair Value
Present market value. When market value cannot be established, expert testimony may be relied on. In such cases, it is essential to consider intrinsic value, selling value, and earning power of the property to arrive at a fair valuation.

False a
Not true. Has two distinct and well- recognized meanings: (1) intentionally or knowingly or negligently untrue; (2) untrue by mistake or accident, or honestly after the exercise of reasonable care.

False And Fraudulent
A representation which was known to be untrue when made.

False Arrest
Includes a false imprisonment, but contains the additional feature of detaining a person with the intention he be turned over to the police for prosecution.

False Claim
Untrue claim or statement.

False Entry
Accounting entry which misrepresents the truth and which is made with the intent to deceive or defraud.

False Impersonation
To falsely impersonate another for benefit to the offender or another.

False Imprisonment
Consists of holding some one without lawful justification in a place against their will.

False Pretences
When one knowingly makes a false representation about a fact with the intent to defraud a victim of his property.

False Representation
An untrue statement made with intent to defraud and to induce another to act upon it The victim must have relied on such statement and must have been induced to act to his injury or damage.

False Statement
A knowingly false statement, or one made recklessly without honest belief in its truth, meant to deceive.

To forge or counterfeit. Has two meanings, (1) being intentionally or knowingly untrue with intent to defraud, and (2) mistakenly and accidentally untrue.

Meaning is dependent on field of law in which word is used. Most commonly refers to group of persons consisting of parents and children; immediate kindred. Also conveys the notion of some relationship, blood or otherwise.

n. Land which is devoted to agriculture, pasturage, stock raising, or similar industry.

Farm Employees
Farm employees are not required to be insured under the workers compensation plan in most provinces and must sue their employers for job related injuries.

Farm Implement Dealer Bond
Bond which guarantees dealer will comply with the Farm Implement Act

Farm Labour
Farm work and work related thereto.

Farm Mutual
Mutual insurance company owned primarily by farmers.

Farmer’s Comprehensive Liability Policy
Insures the legal liability of farmers for bodily injury and property damage to third parties arising out of farming operations. Most insurers automatically include coverage for personal liability.

The ownership, maintenance or use of premises for the production of crops or the raising or care of livestock, including all necessary operations. Farming also includes the operation of roadside stands and farm markets maintained principally for the sale of the insured’s own farm products.

Farming Operation
Iincludes tillage, farming, dairy farming, ranching, raising of crops, poultry, or livestock, and production of poultry or livestock products in an unmanufactured state.

Farming Products
Those things which have a portion of their production upon the farm.

Farming Purposes
Refers to cultivating soil, maintaining improvements for such purposes, raising livestock, and producing farm crops.

Negligence; neglect of duty.

Apprehension of harm.

Performing or doing of an act. Feasor One who commits a tort.

A fixed amount paid by a client to an insurance broker or an insurance company to arrange an insurance policy.

Fellow Of The Chartered Insurance Institute (FCII)
Professional insurance designation (British).

Fellow Of The Insurance Institute Of Canada (FIIC)
Professional insurance designation (Canada).

One who commits a felony.

Done with the intent to commit a crime.

Entry Type of burglary.

Felonious Taking
The taking of something with intent to steal it.

Crime of a more serious nature than a misdemeanour.

Commercial vessel which transports people, vehicles, goods, etc. across water.

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.

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

Fiduciary Bond
Surety bond required to be filed by trustees, administrators, executors, guardians, and conservators to insure they will properly perform their duties.

Field Representative
A representative of the insurer working in a designated territory.

Financial Institutions
Any organization authorized to do business according to provincial and federal laws regarding financial institutions, e.g., banks, trust companies, credit unions, etc.

Financial Responsibility Acts
Provincial statutes which, as a precondition to licensing, require owners of motor vehicles to produce proof of financial responsibility. It assures availability of money to pay damages awarded to victims of motor vehicle accidents. An insurance policy is the most common form of proof.

Financial Statement
Report stating the financial condition or financial results of a business, person or organization on any date or for any period. Two main types of financial statements are balance sheets and profit and loss statements.

n. Sum of money fixed as a penalty for an offence.

(a) The judicial meaning does not differ from its most common and popular meaning, to wit the loss of property due to ignition or burning. (b) To dismiss from employment

Fire Damage
That damage caused by fire.

Fire Department Charges
Provision agreeing to pay costs of dispatching fire department to the fire.

Fire Insurance
Contracts of insurance which, by law, are required to insure direct dam age caused by fire, lightning, and explosions of natural, coal or manufactured gas.

Fire Marshall
Public official charged with the prevention and investigation of fires.

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

Something with a very high degree of resistance to the spread of fire.

First Class Mail
Policy Protects against loss of securities when sent by first class mail.

First Lien
One which must be satisfied before payment of any other charges or encumbrances upon the same piece of property.

First Party Release
Release between insured and insurer.

First Party Release
Between the insured and the insurer.

First Policy Year
The year beginning when the insurance policy is first issued.

Fitness For Particular Purpose
When the buyer relies on the skill or judgment of the seller to select or furnish suitable goods, there is an implied warranty by the seller that the goods will be fit for the purpose for which they are required.

Fixed Assets
Those long-term assets held for use rather than for sale, e.g., land, buildings, machinery, equipment, etc.

Fixed Costs
Costs that remain constant whether any business is done or not.

Fixed Expenses
Are those expenses that continue during the period of the interruption. Fixed expenses include: mortgage interest, interest on accounts payable, salaries, property taxes, professional fees, insurance premiums, regular donations, and trade association dues.

Fixed Liability
One fixed as to time, amount, etc.; e.g. mortgage.

Fixed Penalty Bond
Bond in which the amount of liability or guarantee is specified.

Fixed Price Contract
Contract with a price determined in advance.

That which is fixed or attached to something permanently, e.g., a furnace affixed to a house, sprinkler system installed in a building.

Flat Cancellation
The cancellation of a policy as of its effective date and which is free of any charge to the insured.

Flat Commission
Commission scale which pays the same percentage on all classes of risks.

Flat Rate
Fixed rate which will not be adjusted.

Fleet Policy
A blanket policy which covers a number of vehicles owned by the same insured. In marine insurance, a policy which insures a number of vessels owned by the same insured.

Floater Policy
Policy which covers items that have no fixed locations, e.g., jewellery or other items of personal property worn or carried about by the insured.

Inundation of water over land not usually covered by it.

Flood Insurance
Covers against damage caused by rising or overflowing of bodies of water.

Floor Plan
Diagram of building’s interior layout.

Floor Plan Financing
Arrangement whereby supplier of goods borrows money to purchase additional goods to include in his inventory, the loan being secured by those goods, the amount of which is gradually reduced as the merchandise is sold.

In marine insurance, goods lost at sea which, if floating and unclaimed, belong to the Sovereign.

Following Form Excess Liability Insurance
Excess liability insurance subject to terms and conditions of the primary policy.

For Hire Or Reward
To transport passengers or property for a charge.

Strength directed to an end. Normally used in such manner as to show that unlawful action is intended, e.g., forcible entry.

Force Majeure
Of superior or irresistible force. A clause common in construction contracts to protect the parties in the event the contract cannot be performed in its entirety due to causes which are outside their control, e.g., Act of God.

Accomplished by force.

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.

The reasonable anticipation that loss or damage is a likely result of acts or omissions.

To lose some right, privilege, or property because of breach of contract, neglect of duty, or offense.

Losing the right to something because of non-performance of some obligation or condition.

Forfeiture Bond
Bond in which the full bond amount is forfeited in the event a condition of the bond is breached, regardless of amount of loss or absence of loss or damage.

Forfeiture Of Bond
A failure to perform the condition upon which obligor was to be excused from the penalty in the bond.

A person is guilty of forgery if he fraudulently alters any writing of another without his authority; or makes, completes, executes, authenticates, issues or transfers any writing so that it purports to be the act of another who did not authorize the act, or to have been executed at a time or place or in a numbered sequence other than was in fact the case, or to be a copy of an original when no such original existed; or utters any writing he knows to be forged in a manner specified above.

An insurance policy itself or riders and endorsements attached to it.

Formal Contract
A written contract or agreement.

Without delay. The words “forthwith” and “immediately” convey the same meaning.

Accidental or happening by chance.

Fortuitous Event
An event that happens by accident.

To ship goods by common carrier.

One whose business is to receive goods for further handling, e.g., warehousing, packing, carload shipping, delivery, etc.

Forwarding Agent
One who receives and ships merchandise for others.

Foul Bill of Lading
Bill of lading containing a notation that when received by carrier the goods/cargo had characteristics which might be considered defective or damaged.

Foul Bill Of Lading
Bill of lading which indicates the goods were damaged or that there was a shortage at the time of shipment.

Foundation Exclusion Clause
Clause stating policy does not insure building foundations. As a result, such values will not enter into a determination of insurance under the provisions of a coinsurance clause.

Foundation Wall
Masonry or other wall below the surface which supports a building.

The filling of a ship with water causing it to sink.

Refers to the construction of a building built predominantly with lumber.

Franchise Clause
In an insurance policy, clause stating the insured will pay for damage under an agreed amount and the insurer will pay claims only over a stated amount. Different from a deductible clause, wherein the insured bears the loss in every claim up to the deductible amount I n the franchise clause, once the claim exceeds the agreed amount, the insurer pays the entire claim.

Fraternal Insurance
The form of cooperative life and/or disability insurance furnished by a fraternal beneficial association to its members.

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.

To act wilfully, and with the specific intent to deceive or cheat; ordinarily for the purpose of either causing some financial loss to another, or bringing about some financial gain to oneself.

Fraudulent Misrepresentation
A false statement made knowing it to be false and intending another to act on it to his detriment, or made carelessly or recklessly without regard to whether it is true or false.

Free Alongside (F.A.S.)
The sale price includes all costs of transportation and delivery of the goods alongside of the ship.

Free Of Capture And Seizure (F.C. & S.)
In marine insurance, clause used to exempt the insurer from paying losses caused by capture or seizure by enemies of a country.

Free On Board (F.O.B.)
As part of sale price, seller obligated to deliver goods, on certain conveyance, without expense to buyer.

Price paid for transporting goods by a carrier.

Freight Bond
Bond guaranteeing payment of freight charges to common carrier.

Freight Booking
Making advance arrangements for transportation of goods.

Freight Forwarder
One whose business is to assemble small shipments into a single lot and transport it to point of destination.

Freight Rate
Price charged to carry goods based on number of pieces carried, or the weight or the mileage, or the value of the goods, or a combination thereof.

Freudian Model
The Freudian model holds that we are the result of the workings of the repressed, inner, subconscious being. Freud developed a tripartite view of the human psyche. He believed the human psyche was made up of the id, the ego and the super ego. In Freud’s view, the three parts of the psyche react to the environment on the basis of deep, dark urges, barely understood, buried within the id and the super ego, managed by the conscious, struggling ego.

Friendly Fire
Fire confined to the place it is supposed to be, e.g., fire in a fireplace, etc.

Fringe Benefits
Benefits which are in addition to a person’s employment, e.g., paid insurance, profit-sharing plans, etc.

Having little weight.

Line of property on street.

Full Age
The legal age.

Full Coverage
Insurance which covers all losses with no deductible amount.

Full Disclosure
Where the broker has the authority to bind the insurer, the broker has a corresponding duty to disclose to the insurer all the material information received from the client

Full Interest Admitted (F.I.A.)
In marine insurance, an agreement that the named insured’s ownership or right to collect the proceeds of the insurance is agreed to.

Full Name
One’s first, middle and surname, or the first name, middle initial and surname.

Full Reporting Clause
Clause in reporting policies which provides for penalty to insured in event of loss if he has reported less than he should have reported by the requirements of his policy.

Full Value Declared (F.V.D.)
Notation on an air waybill which indicates that a specific value has been declared to the carrier for carriage of the merchandise.

Functional Obsolescence
The need for replacement because a structure or equipment has become inefficient or outmoded because of subsequent developments or improvements. The loss of value due to inherent deficiencies within the property.

Functional Organization
In a functional organization there will be many staff specialists, each with the authority over specific areas of operations.

Fundamental Rights
Rights which have their origin in the express terms of the Constitution.

Funeral Expenses
Money spent to inter, cremate or otherwise dispose of a corpse, including monument, perpetual care of burial plot, and entertainment of those attending funeral or ceremony.

Fur Floater
Covers furs against all risks wherever they are located.

To supply for a particular purpose.

Those goods, utensils and other articles necessary or convenient for housekeeping and which make a house, room, place of business or public building habitable and agreeable.

Future Damages
Sums awarded for future effects of an injury.

Future Earnings
Earnings which could have been made in the future but were lost as a result of injury.

Future Performance
In contracts, performance which must be completed in the future.


Generally accepted accounting principles.

Garage Liability Insurance
Protection for automobile dealer, repairer, service stations, etc., which covers their legal liability for claims for bodily injury and property damage due to business operations.

A statutory proceeding whereby money owed a person, e.g., from an employer, is applied to payment of debts of such person to another.

In marine insurance, loss arising through a voluntary sacrifice of any part of the ship or cargo, or an expenditure, to safeguard the ship and the rest of the cargo, and which is shared between interests.

General Agent
One authorized to act for the principal in all matters concerning a particular business or employment

General Authority
The authority which authorizes the agent to do everything connected with a particular business, and which binds his principal to all acts within the scope of his employment.

General Average
Designed to provide payment for ocean marine losses voluntarily incurred for the safety of the entire venture. The parties whose property was saved shall contribute to the losses of the parties whose property was sacrificed.

General Average Contribution
In losses involving a general average, such losses or expenditures are contributed to by all the interest at risk on the basis of their respective values.

General Contractor
One who is responsible for the entire job.

General Contractor
Sometimes referred to as “prime contractor”, is one who contracts for the construction of an entire building or project, hires subcontractors, coordinates all work, and is responsible for payment to subcontractors.

General Damages
Awarded for losses that have occurred as a result of an infringement of a right, such as breach of contract or personal injury. For example, an accident might give rise to pain and suffering; compensation for this would be considered general damages. Such damages cannot be quantified with precision in monetary terms, but reflect an amount the court believes necessary to compensate the aggrieved party fairly.

General Damages
These are damages which cannot be quantified with precision in monetary terms, but reflect an amount that the court believes necessary to compensate the aggrieved party fairly.

General Manager
One who directs and controls a corporation’s affairs.

General Partner
One who, with one or more persons, carries on business as a co-owner and who is, along with such others, personally liable for all the partnership’s debts.

General Partnership
One in which all parties work for the benefit and profit of all. All parties share equally in the profits and losses though the capital contributions of each may vary.

Generally Accepted Accounting Principles (GAAP)
Accepted accounting practices and procedures at a specific time.

Genetic Model
This view argues that what makes one person more sensitive and another more hardy is the result of one’s genes. Such theorists look at disorders such as depression, dyslexia and schizophrenia, and they reason that since the disorders run in families, the common source of the disorder must be in the genes. From this, the researchers reason and extrapolate that since one part of the mind is genetically determined, the whole personality must be determined by genes.

Gentlemen’s Agreement
Usually an unsigned agreement which is unenforceable but it is expected to be performed because of good faith.

Geographic Segmentation
Used to segment existing clients based on where they live, either within a country, within a province or even where in a particular area of a city.

Voluntary transfer of property made without compensation.

To transfer ownership without consideration.

Glass Insurance
Covers against accidental glass breakage.

Goals express in specific terms what the objectives state in general terms and which the strategies state conceptually. Goals should not express how the objectives should be accomplished but they should express what is to be acomplished, and by when.

Going Concern
An existing business being conducted in the way for which it was organized. Also, a firm which may have financial difficulties, but still continues to transact its ordinary business.

Going Concern Value
The value of the assets of a firm that is actively in business, rather than the value if those assets were disposed of in a liquidation sale. Good will is included in such value.

Going Price
Current market value.

Good Character
The sum of those virtues which generally forms the basis for someone’s reputation.

Good Faith
The state of mind denoting honesty of purpose, freedom from intent to defraud, and being faithful to one’s duty and obligation. A basic principle of insurance, e.g., normally applicant for insurance must provide all details of risk to be insured, including information regarding previous claims, cancellations, or refusals of insurance.

Good Order
Something is in “good order” when it is in acceptable condition under the circumstances.

Good Will
The intangible asset of an organization that accrues from such items as favourable reputation, drawing ability, good public relations, and perception of skill and knowledge.

Generic term which can include all personal property or can be given a very restricted meaning.

Goods And Chattels
Usually refers to all personal property, and not real property.

Grace Period
A period beyond the due date of premium (usually 30 or 31 days) during which insurance is continued in force and during which payment may be made to keep policy in good standing.

Graded Surplus Treaty
Surplus treaty with capacity varying according to class or net retained line of the ceding insurer.

Gradual Deterioration
Refers to the deterioration of an object which arises naturally out of its use over time.

Grandfather Clause
Provision whereby those affected by a new law or regulation are exempted from complying with it, e.g., normally persons are already engaged in such activity.

Done without reward.

Given without consideration.

Gratuitous Bailee
One to whom possession of personal property is transferred gratuitously and who is therefore required to use great care to avoid liability for negligence.

Gratuitous Bailment
A bailment which is made only for the benefit of the bailor and is not a source of profit to the bailee.

Gratuitous Licensee
Person who does not have an invitation to come on to the property of another, but who has permission of the occupier to do so.

Gratuitous Passenger
Person riding in an automobile at invitation of owners or authorized agent and who does not pay for the ride.

Green Book
An annual automobile insurance experience exhibit produced for government by IBC and based on the premium income and claims results reported by all licensed insurers as required by the various Provincial Insurance Acts under which insurers are licensed.

Flagrant; beyond allowance.

Gross Average
Commonly called “general average”, a provision whereby if loss or damage occurs to a vessel or its cargo at sea, the loss is adjusted and apportioned between the owner, the freight, and the cargo, in proportion to their respective interests and losses. I n this way, one will not suffer the whole loss, but will each contribute ratably.

Gross Earnings Form
Business Interruption form of insurance under which the insured’s gross earnings are insured. Indemnity period commences at time of loss and is restricted to such time as is required to replace the lost or damaged property.

Gross Line
Amount of insurance a company has on a particular risk, includes the amount it has reinsured.

Gross Loss
Total amount of loss before applying reinsurance.

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.

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.

Gross Premium
Net premium plus loading for expenses and contingencies.

Gross Profit
The difference between sales and cost of goods sold before allowance for operating expenses and income taxes.

Gross Sales
Total sales without discounts or other adjustments.

Ground Water
Water in the subsoil, spring, or shallow well.

Group Insurance
Usually a contract of life, accident and health insurance between insurer and employer for benefit of employees.

Guarantee Endorsement
Endorsement providing that if insurance company becomes insolvent, reinsurer shall pay insured for loss to mortgaged property covered by reinsurance.

Guaranteed Freight
Freight which is not prepaid but which is payable whether or not the merchandise arrives at the final point of destination.

Guaranteed Replacement Cost
Coverage for full cost of replacing damaged property without any allowances or deductions (e.g. depreciation) as long as the property was properly insured initially.

One who becomes secondarily liable for another’s debt or performance. Different from a strict surety who is primarily liable with the principal debtor. See also Surety.

v. To assume the responsibility of a guarantor.

n. A promise to answer for the debt or default of another. A guaranty is a contract that something will be done exactly as it is agreed to be done. Often confused with suretyship but can be distinguished by whether or not the undertaking is a joint undertaking with the principal (suretyship) or a separate and distinct contract (guaranty).

Guaranty Company
A corporation authorized to transact the business of entering into contracts of guaranty and suretyship.

Guaranty Or Fidelity Insurance
Insures against loss arising from infidelity of employees and others holding positions of trust, or against the insolvency of debtors, losses in trade, loss by non-payment notes, or against breaches of contract.

One given lawful control over the care and management of the person, or the estate, or both of a child while a minor.

Guiding Principles
Certain rules and principles agreed to majority of insurance companies that override actual wording of a policy in order to ensure efficient settlement of a claim.


Residence; place abode, dwelling place.

Hail Insurance
See Crop Hail Insurance.

Hallucinogenic Drug
One that induces hallucinations, such as LSD, mescaline, etc.

Words, gestures and actions which annoy, alarm or verbally abuse another person.

n. A space of deep water sheltered by adjacent land affording a safe anchorage for ships.

Hard Market
A hard market occurs when low profit margins force out some of the competition. The remaining insurers usually have enough business to enable them to be selective about the kinds of property they insure. Insurers generally return to a more disciplined underwriting approach in a hard market and the insured normally receives little or nothing in the way of rate discounts.

The loss or detriment to a person resulting from any cause.

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

Exposed to or involving danger.

Head of Family or Household
One who supports and maintains in one household individuals related by blood, by marriage, or by adoption.

Health Insurance
Insurance which provides for payment of benefits with respect to bodily injury, disablement, sickness or accidental death, including expenses incurred in prevention of sickness.

Heavy Equipment Contractor
One whose operation includes use of heavy construction equipment, e.g., road builders, excavators, sewer contractors, etc.

Disregard of the rights or safety of others.

A common law term meaning the person appointed by law to succeed to the estate in case of intestacy.

Valuable personal property items handed down through generations of a family.

As related to a decision of a court; decided.

Held Covered
A provisional acceptance of risk, subject to confirmation that cover is needed at a later date.

From the present time forward, excluding all the past

Denotes the future, excluding the present and past.

Denotes time past

In a document, directs attention to information which is following.

Hidden Asset
Asset recorded in company’s books which reflects a value substantially below the market value.

Hidden Defect
Deficiency in property which cannot be detected by reasonable inspection and for which a seller or lessor is generally liable if such defect causes harm to a user.

High Or Great Diligence
Extraordinary diligence, or that which very prudent persons take of their own concerns.

High Seas
Portion of sea or ocean which is beyond the territorial jurisdiction of any country.

Roadway or street which all people have the right to use and which is publicly maintained.

Highway Acts, Or Laws
Laws governing the laying out, construction, repair, and use of highways.

Highway Crossing
Place where a railroad track intersects a highway.

Highway Traffic Act
Laws which govern the obligations of the provincial governments and users of roads.

(a) Robbery of goods and/or vehicle while in transit. (b) By threat or use of force, the hold up of a vessel or aircraft to transport one to a destination other than that intended.


v. To purchase the temporary use of something or the labour or services of another for an agreed compensation

n. Payment for use of something or for labour or services.

Generically used, refers to person of either sex.

Hit And Run Accident
Criminal act involving a collision between a motor vehicle and pedestrian or with another vehicle in which the driver leaves scene without identifying himself.

Denotes a period of time already passed.

Fence enclosing project site.

An activity engaged in for purposes unrelated to profit.

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

Taking money or property by threat or the use of force or violence.

Under terms of a contract, the amount which is not payable until the contract has been completed and the period within which any liens must be filed has expired.

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.

The house or dwelling in which one lives.

Home Office
Company’s corporate head office.

Home Port
The port where a vessel is registered, or the port closest to the usual residence its owner.

Homeowners Insurance
Insurance policy which insures dwelling building and personal property against certain risks loss. Most such policies also include personal liability coverages.

The dwelling building, including adjoining land where the head of the family dwells.

A voluntary or gratuitous payment.

Hospital Expense Insurance
Covers expenses incurred as a result of illness or injury.

Hospital Professional Liability Insurance
Covers against claims for injury arising out of malpractice, errors and omissions, and mistakes for which hospital staff is legally liable.

Innocent person who is held captive by one who threatens to harm him if his demands are not met.

Hostile Embargo
One which is laid upon actual or prospective enemy vessels.

Hostile Fire
One which becomes uncontrollable or breaks out from where it was intended to be and becomes a hostile element.

Act or series of acts showing antagonism.

Structure used as living quarters for one or more persons or families.

House Air
Waybill An air waybill issued by a freight forwarder for an air shipment.

See Door To-Door.


adj. Belonging to the house and family.

n. For insurance purposes, term is synonymous with “family” and includes those who dwell together as a family under the same roof.

The vessel or aircraft excluding its cargo.

Hull Insurance
Insurance covering a vessel or aircraft and its machinery or equipment.

Hull Syndicate
Ocean marine underwriters who have joined together for the purpose of insuring vessels on a joint basis.

Human Resource Management
The process of identifying and selecting the employees best qualified to achieve the strategic plan.

Humanitarian Doctrine
That which relieves a plaintiff of responsibility for his negligence where it can be shown that the defendant had last opportunity to avoid the accident.

Not restricted only to physical injuries, but includes mental pain and discomfort.

One who has a lawful, living wife.

Extreme emotionalism, characterized by attention-seeking, impulsive demonstration.


Insurers Advisory Organization.

Insurance Brokers Association of Canada.

Insurance Bureau of Canada

Incurred But Not Reported.

I.C.C. (Institute Cargo Clauses)
In marine insurance, three basic sets of these clauses. The “A” clauses cover all risks, subject to specified exclusions. The “B” and “C” clauses cover specified risks, subject to specified exclusions.

Insurance Crime Prevention Bureau.


Insurance Institute of Canada

For all practical purposes, exactly the same.

Absence of knowledge.

Against the law. Illicit Unlawful, prohibited.

Illicit Trade
In marine insurance, trade which is unlawful by the laws of the country where the cargo is destined.

A disease or ailment that seriously affects the general soundness and healthfulness of one’s system.

Not pertinent, without weight.

Immediate Cause
The last cause which directly produces the result or event. Distinguished from “proximate” in that the proximate cause (that which directly and efficiently brings about the result) may not be immediate, e.g., If a drunken man falls into the water and drowns, his intoxication is the proximate cause of his death, but the immediate cause of death is suffocation by drowning.

Without delay. The words “immediately” and “forthwith” convey the same meaning. These are stronger than expression “within a reasonable time” or “as soon as is practicable” and imply prompt, vigorous action without any delay.

Immigrant’s Bond
Bond guaranteeing an alien will not become a public charge.

On the point of happening.

Imminent Peril
Under humanitarian doctrine, means certain, immediate, and impending. That position of danger to the plaintiff in which, if the existing circumstances remain unchanged, injury to him is almost certain.

Opposite of good morals.

Exemption from certain obligations which the law generally requires others to perform.

To weaken, diminish, or otherwise affect in an injurious manner.


Opposite of “express”, i.e., where the intent is not given in explicit and direct words, but is implied from the circumstances, the general language, or the conduct of the parties. Different from “inferred” to the extent that the hearer or reader “infers” while the writer or speaker “implies”.

Implied Agreement
(a) Implied in fact. One presumed from the acts or behaviour of the parties, rather than that expressed by them in written or spoken words. (b) Implied in law. One where a promise is implied to perform a legal duty.

Implied Authority
In law of agency, power given to agent though such power is not expressly asserted. Includes other acts deemed necessary in conjunction with the agent’s express authority.

Implied Authority
The authority which is implied from the principal’s conduct and which the principal intends his agent to possess.

Implied Consent
Presumption based on signs, actions, or facts, that consent has been given.

Implied Consent
See Consent.

Implied Waiver
A waiver is implied where one party has acted in such a manner as the other party believes there is an intent to waive his rights or the advantage to which he may be entitled.

Implied Warranties
In sale of goods, those promises which exist in law and which are understood to apply, e.g., that goods will be of merchantable quality.

That which no person can do, e.g., an impossible contract is one which the law will not hold binding on the parties because of the natural or legal impossibility of the performance by one party.

One who intends to deceive by pretending to be someone he is not.

Confining one in prison.

Not apt to be true.

An addition made to property that enhances its value, beauty or utility or adapts it for new or further purposes.

Improvements And Betterments
Additions or changes to rented premises by a tenant at his own expense. Also called Tenants Improvements.

In legal terms, when an act, fact or quality is ascribed or charged to someone.

Imputed Negligence
Negligence of one party which may be charged to another depending upon their relationship, e.g., negligence of an agent acting within his employment is chargeable to the principal.

In Common
Shared by several, without apportionment or division into individual parts, for the equal advantage, use, or enjoyment of all.

In Fact
Actual, as opposed to implied or inferred.

In Force
Policy which has not expelled or been cancelled.

In Lieu of
Instead of.

In The Course Of Employment
Relates to time, place and circumstances under which accident occurred, and means such injury happened while worker was working in his employer’s service.

Not sufficient.

In marine insurance, cargo stowed so that it does not project over the side or rail of the vessel.


Lack of physical or intellectual power, or of natural or legal qualification.

One who maliciously sets another’s building on fire.

Date and time on which coverage under an insurance policy comes into effect.

Inchmaree Clause
In marine insurance, provision which covers loss or damage resulting from negligence of master, or from any latent defect in machinery or hull, charterer, mariners, engineers and pilots.

Something following as subordinate; something incidental to the main purpose.

Incidental To Employment
A risk is “incidental to employment” when it relates to what a worker has to do to fulfil the duties of his or her employment.

To spur on, e.g., incite a riot.

Money one receives from one’s business, investment, or employment.

Income Control
Income control begins once the budget has been prepared. The brokerage must institute financial management discipline over the flow of these funds.

Income Statement
The Income Statement of the brokerage is the most important financial document in determining value because the income-producing ability of the brokerage is the most significant item in determining value.

Not having the ability, legal qualification or fitness to fulfil a required duty.

Incontestability Clause
In life and health insurance, a clause indicating that after a certain period of time, the insurer cannot dispute statements contained in the application. Normally, does not apply to fraudulent statements or misstatement of age.

To create a corporation.

The act of forming a corporation.

To become liable.

Incurred But Not Reported (I.B.N.R.)
A liability for future payments on (a) claims which have occurred during the accounting period but which have not yet been reported, and (b) expected adverse development of claims which have occurred and been reported but not yet settled.

Incurred Loss Ratio
Incurred losses divided by earned premium.

Incurred Losses
Losses occurring within a fixed period whether adjusted and paid or not.

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

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

Indemnity Bond
A bond which indemnifies the obligee against loss which arises as a result of breach of trust or failure on the part of a principal to perform duties.

Indemnity Contract
Written contract whereby one party undertakes to indemnify the other in the event of loss or damage arising from some contemplated act on the part of the indemnitor, or from some responsibility assumed by the indemnitee, or from the claim or demand of a third person, in other words, to make good to him such pecuniary damage as he may suffer.

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.

Independent Broker
An independent broker is legally the agent of the insurance buyer, and has contracts with a number of insurance companies.

Independent Contractor
One who contracts to do a piece of work according to his own methods and is subject to his employees control only as to end product or final result of his work.

Not having an immediate application; not direct in connection.

Indirect Damage
Loss resulting from a peril, but not caused directly and immediately thereby. May be covered by insurance, e.g., Business Interruption, Leasehold Interest, etc.

Indirect Loss
Losses which arise as a consequence of direct losses. These losses are insurable under policies of indirect damage insurance.

n. A single person.

adj. Pertaining to one single person.

Individual Fidelity Bond
Bond securing the employer against loss from an employee’s dishonesty or fraud.

Not subject to separation.

To bring on.

The benefit which one will receive from entering into a contract is the inducement for making it.

Inescapable Peril
Term refers to the peril which the plaintiff is helpless to avoid by his own efforts, but which requires action on part of the defendant to avoid it See Last Clear Chance Doctrine.

Not able to be avoided.

Inevitable Accident
An accident which cannot be prevented by human skill or foresight or one produced by an irresistible physical cause.

The state of one under the age of legal majority, generally 18 years of age.

One who has less power than another and is bound to obey him.

An ailment or disease which impairs the physical condition and health of a person. A known infirmity or pre-existing condition must be made known to the insurer under a policy of health insurance.

Informal Contract
Usually an oral contract rather than a written one.

Below. Opposite of Supra, above.

A breach of a law, contract, right or duty.

A trespass or encroachment upon. Commonly used to describe invasions of those rights secured by patents, copyrights, and trademarks.

Refers to the right of a lessee to enter and return from lands in question.

One who lives in a given place and has his home there.

Inherent Or Latent Defect
A defect which is in the product itself and is not easily discoverable.

Inherent Vice
Something within a commodity, or other kind of property, that causes its own demise over time, e.g., spontaneous combustion, spoilage of fruits, vegetables, dairy products, etc.

Inherently Dangerous
Some thing in which danger of an injury arises from the product itself and not from any defect in it An activity is inherently dangerous when it is likely that injurious consequences will attend doing of work.

Initial Carrier
The carrier who first receives the goods and initiates the transportation process.

A court order prohibiting the defendant from doing something, or directing him to do something.

Injunction Bond
Bond guaranteeing the defendant’s ability to pay. Also used as a guarantee in court as a substitute for an injunction.

To damage, impair or do harm to.

Injurious Words
Words used to slander or libel another.

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

Inland Marine Insurance
Originally a form of insurance protection for goods transported other than on ocean. Now, term applies to a variety of coverages on floating personal property and to general liability as a bailee, e.g., jewellery, furs, contractor’s equipment, bailee’s customers. Also used to insure bridges, communication towers, pipelines, etc. which are considered to be “instrumentalities of transportation.”

Inland Waters
Waters within or partly within Canada excluding the open sea, e.g., rivers, bays, lakes.

Innocent Trespass
A trespass to land committed by mistake or in honest belief one was acting within his legal rights.

Innocent Trespasser
One who trespasses unintentionally or in the honest belief he has a right to do so and who removes sand or other materials from such land.

A condition which renders one unfit to enjoy liberty of action because of the unreliability of his behaviour that may result in danger to himself and others.

Inability to pay one’s debts.

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.

Installation Floater
Coverage for equipment in transit to the job site, while awaiting in-stallation on site and during installation until accepted or interest of the insured ceases, whichever first occurs.

Instalment Premium
A premium which is paid in several payments.

Instalment Sale
Plan wherein buyer makes down payment and signs a contract to pay the balance in instalments over a period of time.

Institute Strikes, Riots and Civil Commotion Clause (S.R. & C.C. Clause)
In marine insurance, clause which provides protection to a cargo owner for loss arising out of strikes, lock-outs, etc.

A written document.

Able to be insured against loss, damage, etc.

Insurable Interest
Generally one has an insurable interest where he derives pecuniary benefit or advantage by preservation and continued existence of property or would sustain pecuniary loss from its destruction.

Insurable Value
The property’s value for insurance purposes.

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 Binder
Insurance binders are contracts of insurance. In the insurance business, it is common for brokers to bind an insurer on a risk. This means that the broker has committed the insurer to provide a contract of insurance on the subject matter under discussion. Insurance binders may be oral or written.

Insurance Brokers Association of Canada (IBAC)
The national body of Canada’s independent insurance agents and brokers. Organized in 1921, much of its work is directed to safeguarding the public interest by establishing and maintaining a high standard of ethics and practice. Also involved in development of educational programs for insurance brokers. Membership is made up of provincial and regional brokers associations.

Insurance Bureau of Canada (IBC)
Trade association of Property/Casualty underwriters in Canada.

Insurance Crime Prevention Bureau (I.C.P.B.)
A Canada wide organization supported by property and casualty insurers which investigates fraudulent insurance claims and provides loss prevention information.

Insurance Institute of Canada (I.I.C.)
Provides educational services for the property and casualty insurance industry.

Insurance To Value
Insuring the full value of property, or at least to that value that meets the co-insurance requirement.

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.

One who assumes risk or agrees to underwrite a contract of insurance.

Insurer’s Advisory Organization (I.A.O.) (1989) Inc.
National organization of Prop-erty/Casualty insurance industry that provides technical services in loss control engineering sciences, inspection, ratemaking, and actuarial sciences.

Insuring Agreement
Describes the coverages provided by the insurance policy.

A rebellion against the government.

Intangible Property
That which has no physical substance, e.g., claims, interests, and rights.

Intangible Property
Property that have no physical substance and consist of legal rights rather than things. Intangible properties may be difficult to recognize and to value.

Consists of “legal rights” rather than things and includes patents, stocks, bonds, goodwill, trademarks, franchises, and copyrights.

Intended Use Doctrine
Two factors are considered in product liability cases: the maker’s marketing scheme, and the foreseeability of the risks which are inherent in the product when used for the purposes intended.

The state of mind with which an act is done or not done. Not to be confused with motive which is what prompts a person to act or not to act

Intentional Tort
The wrong or tort committed by one who knew the act was illegal, as opposed to one who commits a wrong due to negligence.

A legal claim in something. Any right in the nature of property, but less than title. See Insurable Interest

To hinder.

Interim Receipt
The receipt issued for premium paid when an application for insurance is made. If rejected, the money is refunded, less the pro rata premium.

One who interferes in affairs which are none of his business.

An arbitrator. One who is employed to negotiate a matter between two parties, and who for that purpose may be agent of both; e.g. insurance broker.

Intermediate Excess
Coverage exposed to catastrophic losses and to policy limit exposures, exceeding probable maximum loss.

Interprovincial Carrier
One who commercially transports goods or passengers across provincial boundaries.

Intervening Cause
An independent cause which intervenes between the original wrongful act or the omission and the injury. When it turns aside the natural sequence of events and produces a result which would not otherwise have followed and which could not have been reasonably anticipated, the defendant is relieved of liability.

Intervening Cause
That which comes between property would bring at sale. the initial happening and the ultimate effect.

When person dies without making a will or without leaving anything to testify how property is to be disposed of after his death.

Under the influence of an intoxicating liquor.

Intoxicating Liquor
Liquor used as beverage, and which when consumed in sufficient quantities ordinarily produces entire or partial intoxication.

State whereby one does not have the normal use of his physical or mental faculties because of drinking intoxicants. In such instances, a person is rendered incapable of acting in the manner in which an ordinarily prudent and cautious person, in full possession of his faculties, using reasonable care, would act under similar circumstances.


Intrinsic Value
The inherent value of a thing itself, rather than any special features which make its market value different.

One who enters land without legal right.

Wrongfully entering upon or taking possession of property of another.

Overflow of waters from their natural bed or confines.

Not binding.

(a) Intruding upon the rights of another. (b) Encroachment of an army for conquest or plunder.

Invasion of Privacy
Wrongful intrusion into one’s private affairs in such manner as to cause mental suffering, shame or humiliation to persons of ordinary sensibilities.

(a) Good held for sale or lease. (b) Written schedule of goods on hand.

In the law of negligence, and with reference to trespasses on realty, the express or implied invitation to others to enter upon, remain in, or make use of one’s property.

Invitation To Bid
An advertisement for bids to be submitted on a particular job, usually containing all specifications necessary to make an informed bid.

To be an invitee, one must (a) be invited either expressly or by implication; (b) enter in connection with the owner’s business or activity that is conducted on his land; and (c) there is mutuality of benefit or benefit to the owner.

A written account, or itemized statement of merchandise shipped or sent to a purchaser together with the quantity, value or prices and charges added.

Without power of choice.

That which cannot be changed.


Goods that are voluntarily thrown into the sea in a storm or other emergency for the purpose of lightening the ship.

In marine insurance, throwing the cargo or ship’s property overboard to save other property from a common danger.

Jewellers Block Insurance
Insurance policy specifically designed to insure broad exposures common to jewellery trade.

Jewellery Floater
All risk policy designed for scheduled jewellery wherever it may be.

Task or something to be done for a set fee or compensation.

Generally, a wholesaler. Middleman; one who does piecework.

Coupled together in interest or liability.

Joint Action
An action brought by two or more as plaintiffs or against two or more as defendants.

Joint Adventure
A commercial or maritime enterprise undertaken by several persons jointly.

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 person commits a tort 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.

Joint And Several Liability
Responsible together and individually.

Joint Defendants
Persons who are sued and tried together.

Joint Enterprise
Also called “common enterprise”.

Joint Liability
One wherein joint obligor has right to insist that co-obligor be joined as a co-defendant with him, that is, that they be sued jointly.

Joint Liability
Liability for which more than one person is responsible.

Joint Negligence
When people act together and either do something they should not do or fail to do something which they are obligated to do.

Joint Tort
Where one is injured due to the neglect of a common duty of two or more persons, the tort is joint

Joint Tort-Feasors
Two or more persons jointly or severally liable in tort for the same injury to person or property.

Joint Venture
A partnership engaged in a business undertaking which terminates upon completion of the project or purpose.

Temporarily taking an automobile without the intent of keeping it permanently.

Official decision of a court.

Pertaining to the administration of justice.

Judicial Bonds
Bonds required by court for appeals, costs, attachment, injunction, etc.

Judicial System
A jurisdiction’s network of courts.

Geographic area of authority. Also refers to power and authority of a court to hear and determine a judicial proceeding. In circumstances where obligation is on insured to provide notice to “authorities having jurisdiction” means those having authority to act, e.g., police.

A group of citizens temporarily selected and invested with power to make a decision in a court case after hearing all the evidence.

Jury Trial
Court case tried before a jury as opposed to before a judge.

Just Cause
Fair, adequate, reasonable cause.

One who has not reached his legal majority age. In most common meaning, refers to young criminal offender.


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.

The forcible abduction and carrying away of another person against his will.

Class, grade.

King’s (Queen’s) Bench
One of the superior courts of common law in England. Derives its name from fact that king or queen used to sit there in person.

Kinnie Rule
A rule used by adjusters in apportioning losses between non-concurrent policies.

Knock-For-Knock Agreement
Agreement between certain automobile insurers whereby each agrees to pay their insured’s collision claim and waive any recovery rights against the other insurer.

To understand.

Consciously and intentionally.

Being acquainted with the facts or truth.


Labour And Material Payment Bond
Contract bond guaranteeing that the sub trades and suppliers will be paid for the work and materials that enter into the project.

Lading, Bill of
See Bill of Lading.

Generally, the materials of the earth, including fields, meadows, moors, waters, and rock.

Land Restoration Bond
Bond guaranteeing land will be restored to an acceptable condition, e.g., garbage disposal sites, quarries, etc.

One who owns property and leases it to another.

Landlord And Tenant Relationship
Denotes the contractual relationship between lessor and lessee.

Termination of insurance policy because of failure to pay the premium.

Lapsed Policy
Insurance policy on which there has been default in payment of premiums.

Unlawful taking away of goods or property of another without the owners consent and against his will.

Last Clear Chance Doctrine
This doctrine imposes upon one ad uty to exercise ordinary care to avoid injury to another who has negligently put himself in a dangerous position, and who appears not to recognize the danger or is unable to avoid it. Necessary elements of doctrine of “last clear chance” are: (1) plaintiff was negligent by placing himself in a position of immediate danger, (2) plaintiff was unable to remove himself from such peril by the exercise of reasonable care, (3) defendant discovered or should have discovered plaintiffs dangerous situation in time so that by exercising reasonable care he could have prevented the accident, (4) defendant failed to exercise any reasonable care, and (5) defendant had the last clear chance to prevent the accident.

Latent Defect
A hidden or concealed defect which could not be discovered by reasonable and customary inspection.

A body of rules of action or conduct having binding legal force.

Law Of Agency
One who has permitted or directed another to act for his benefit and subject to his direction and control.

Law of Agency
A body of common law that govern the rights and responsibilities that arise when one entity represents another.

Law Of Guaranty
And Suretyship The individual or corporation whose performance is being guaranteed.

Law Of Large Numbers
Premise on which insurance is built, that being that the degree of uncertainty is reduced as the number of events increases. A basis for predicting losses likely to occur in large group of similar risks.

Legal, not forbidden by the law.

Lay-Up Endorsement
Used in aircraft and marine insurance. Allows for refund of a portion of the premium when aircraft/vessel is not used for extended period of time.

Layer Rating
Method of establishing policy premium by assigning rates to various layers of coverage, according to the probability of loss in each layer.

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

Involves guiding the activities of employees and creating an environment where employees will excel at what they do for mutual benefits of the employees themselves and the brokerage overall.

Diminution of liquid caused by leaking from the container in which it was placed.

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.”

Lease Bond
Bond given to lessor (landlord) guaranteeing the lessee (tenant) will perform the terms of the lease.

Leasehold Improvements
Improvements made by tenant (lessee.)

Leasehold Interest
Interest of lessee in value of lease which is the difference between the total remaining rent under the lease and that which lessee would currently pay for similar space for the same time period.

Leasehold Value
The value of the lease when market rental for similar space is higher than rent paid under the lease. The value of a leasehold interest.

Permitted by law.

Legal Age
The age at which a person may enter into binding contracts or commit other legal acts, in most provinces age 18. However, the age may be higher for certain acts, such as drinking, or lower for other acts, such as driving.

Legal Assignment
The old Courts of Law considered it wrong in principle to make one person another’s debtor without the debtor’s consent.

Legal Cause
In tort law, when one invades some legally protected interest of another, the person causing such harm shall be responsible unless there is some defence to liability.

Legal Description
The description of real property by government survey or lot numbers which includes a description of any easements on the property.

Legal Duty
An obligation arising from law or a contract which the parties have entered into.

Legal Entity
A body, other than a natural person, which exists sufficiently so that it can function legally, be sued or sue, and make decisions, such as corporations.

Legal Incapacity
Implies that one has a right to do something, but is prevented from doing it because of some impediment, e.g., below the age of majority, confined to prison, etc.

Legal Injury
Violation of legal right.

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

Legal Name
To be legal, consists of one Christian name and one surname. The addition, deletion or mistake in middle name or initial is of no legal consequence.

Legal Negligence
The failure to perform duty law imposes on one party for the benefit of another.

Legal Obligation
Any duty that is imposed by law.

Legal Proceedings
All proceedings authorized by law which are brought in a court for the purpose of acquiring a right or enforcing a remedy.

Legal Representative
One who represents the interests of another.

Legal Residence
The dwelling place where one permanently lives and to which he intends to return despite temporary residences elsewhere or despite temporary absences.

Legal Right
All those rights one enjoys, including natural rights, rights existing as result of contract, and rights created or recognized by law.

Legal Subrogation
Whereby person secondarily liable pays debt and becomes subrogated to rights of creditor.

Legal Tender
All coins and currencies of Canada.

Legalized Nuisance
Some thing which would constitute a nuisance at common law but because it is constructed or maintained under sufficient legislative authority, cannot be objected to by private persons, e.g., hospitals, municipal parks.

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

The body of persons that makes statutory laws for a state or nation.

To give something for a fixed period of time, with or without compensation.

One from whom something is borrowed.

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

Lessee’s Interest
For purposes of determining value of potential sublease or sale of lease, is market value of the property less the interest of the lessor. The ratio of the return on the lease to the market value without the lease is the measure of the lessor’s interest.

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

Award a contract to successful bidder.

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 tadvancement so long as it complies with the conditions specified in the credit.

Letters Patent
Instrument issued by a government confirming a right to the exclusive possession and enjoyment of land, or of a new invention or discovery.

Letting Out
Leasing property or awarding a contract.

All character of debts and obligations.

Liability Created By Statute
A liability which would not exist but for a statute.

Liability For Damage
Liability for an amount to be determined by the courts.

Liability Imposed By Law
Liability imposed in a definite sum by a final judgment against insured.

Liability Insurance
Covers against third party claims for bodily injury and property damage for which the insured is legally liable.

Liability Limits Maximum
Amount of insurance provided under a policy of liability insurance.

Responsible; answerable.

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

Permission to do some thing.

License Bond
Required by government authority as a precondition to the granting of a licence. Guarantees payment to obligee 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.

One who comes on to the premises for his own purpose but with the occupier’s consent Generally, the duty of care owed by the occupier is that of reasonable or due care. See Also Invitee.

False statement deliberately told with the intent to deceive.

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

Lien Bond
Guarantees that any valid lien daim will be paid.

Life Expectancy
Average number of years of life remaining for persons of a given age and sex, according to statistical tables.

Life Insurance
Policy in which insurer agrees to pay a specified sum to a beneficiary on the death of the insured.

Corresponding in quantity, quality, or degree.

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.”

Less than reasonably certain.


Limit of Liability
Maximum amount stated in a policy which an insurer is obligated to pay in event of a loss.


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

Limited Partnership
Partnership consisting of one or more general partners who manage business and who are personally liable for partnership debts, and one or more limited partners who contribute capital and share in profits but take no part in running business and incur no liability with respect to partnership obligations beyond the amount of their contribution.

Limited Partnership
Partnership consisting of one or more general partners who manage business and who are personally liable for partnership debts, and one or more limited partners who contribute capital and share in profits but take no part in running business and incur no liability with respect to partnership obligations beyond the amount of their contribution.

In insurance, term used to refer to types of policies or exposures making up an account or class of business written by an insurer.

Line Guide
Underwriting standard or guideline representing the maximum amounts of insurance which a company is prepared to write on various classes of risk.

Line of Credit
The maximum borrowing power of a person from a financial institution.

Line Security
The ability of the telephone line to withstand tampering.

Liquid Assets
Cash or assets that can be converted immediately to cash.

Liquidated Damages
The amount of damages as determined by judgment or such sum as is specified by parties to bond or other contract as amount available to one party when the agreement has been breached by the other.

Liquidated Damages Clause
A clause that sets out the “cost” of breaching the contract, right in the contract itself.

Winding up of a business. Process of reducing assets to cash, discharging liabilities and dividing surplus or loss among creditors and debtors.

A receiver appointed for the purpose of winding up a company.

Liquidator’s Bond
Bond guaranteeing faithful performance of a liquidator’s (receiver’s) duties.

Refers to condition of person or business in terms of their ability to convert assets into cash.

Party to a lawsuit.

To carry on a lawsuit.

A lawsuit.

Rental of vehicles, boats.

Domestic animals raised or used on a farm, including fur bearing animals raised in captivity.

Livestock Insurance
Insurance policy designed to insure livestock for death resulting or made necessary from a variety of causes.

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

Lloyds Register
Detailed record of ships of all nationalities. Information regarding age, di-mensions, place of construction, registry, and ownership is provided for each vessel.

Lloyds Underwriters
An aggregation of individuals engaging in business under a common name and for profit. Business is done through an attorney-in-fact who has the authority to obligate the underwriters severally on contracts of insurance made or issued by it, in the name of the aggregation of individuals, to and with any person(s) insured.

The rate over and above the fire rate which is charged by the insurer to provide additional policy coverages. Also the difference between gross and net premiums.

Something given to a person for temporary use, with or without compensation for its use.

Loaned Servant Doctrine
Under this doctrine, when one lends his servant to another for a particular employment, that servant effectively becomes the servant of the one to whom he is lent

Lock Replacement
To replace the locks and keys after an insured theft.

A withholding of work from employees; counterpart of employee’s strike.

One who has use without actual or exclusive possession.

Furnished or unfumished area in another’s house, occupied for habitation.

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 (Risk) Control
As relates to risk management, those techniques which serve to reduce the frequency and severity of losses.

Loss Adjustment Expense
Insurer’s expense incurred to adjust a loss.

Loss Expectancy
The expected cost of losses over a specific period.

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 of Earning Capacity
Damage to one’s ability to earn wages in the future.

Loss Payable Clause
A provision in property insurance that authorizes payments to persons other than the insured to the extent that they have an insurable interest in the property, e.g., a mortgagee.

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

Loss Prevention
As relates to risk management, any measure taken to reduce the frequency of a particular loss.

Loss Probability
Likelihood a loss occurring.

Loss Ratio
Proportion between earned premiums and loss payments, including adjustment expense, made over a specified period.

Loss Reserve
Assets set aside by insurance company to pay for losses which will probably arise or which have arisen but have not been paid.

Losses Outstanding
Losses which have been incurred but not yet paid.

That which the owner has involuntarily lost possession or custody of, usually as a result of accident or his own negligence and which cannot be recovered by an ordinarily diligent search. In marine insurance, the term means “lost at sea,” whereby a vessel has totally gone from the owners against their will and of which they are unaware.

Lost Instrument Bond
Indemnities the issuer of a duplicate stock or bond against any loss it may suffer by reason of having issued the duplicate.

Lost Or Not Lost
In marine insurance, a provision which provides coverage back to the beginning of a voyage now in progress, notwithstanding that the loss occurred before the contract of insurance was concluded, unless the assureds were aware of the loss and the underwriters were not.

Lost Property
Property involuntarily parted with and which the owner does not know where to find.

Low Or Slight Diligence
That which persons of less than common prudence, or of any prudence, take of their own concerns.

Lowest Responsible Bidder
Bidder who has lowest price and has evidenced by prior performance that he is financially able and competent to complete work.


Lump Sum Contract
Contract for a fixed price.


Magnet Property
Business that have the ability to bring large numbers of customers to an area. These businesses can also be called anchor or leader properties.

Mail Fraud
The use of the mails to execute a fraudulent scheme.

Mail Service
Contract Bond Bond which guarantees that mail delivery will take place as contracted.

Mailable matter which is properly addressed, stamped with the proper postage, and deposited in a proper place for receipt of mail

To cripple; mutilate; disable.

Up keeping and preserving the condition of the property.

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.

Legal age.

Majority Shareholder
A party holding or controlling more than fifty percent of the issued shares of a corporation – has all control over a corporation and can act with little regard for the interests of the minority shareholders.

Performing an unlawful act. Also, any wrongful conduct that affects, interrupts or interferes with the performance of official duties.

The doing of a wrongful act with an intent to inflict injury or damage.

Having done with wicked or mischievous intentions or motives.

Malicious Act
An unlawful act intentionally done to injure another.

Malicious Mischief
Wilful destruction of personal property of another from actual ill will or perverse intent.

Malicious Prosecution
A suit begun in malice without probable cause to believe the charges can be sustained.

Malicious Trespass
The act of one who maliciously injures or causes to be injured any property of another.

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.

Management is the process of achieving brokerage strategies, objectives, and goals through involving human and other resources. It is a purposeful activity requiring intelligence, skill, and practice.

(a) Self-evident. (b) Document used in shipping and warehousing containing a list of the contents, value, origin, carrier and destination of the goods to be shipped or warehoused.

Manifestation Theory
Under this theory, bodily injuries or property damages that become apparent or manifest themselves trigger coverage of the policy in effect at the time that the injury becomes apparent.

Document provided by insurer to its agents outlining underwriting rules and rates to be charged.

Manual Rates
Usually the cost of a unit of insurance or bond protection as published in the pertinent company manuals, but may also refer to rates developed by the application of a recognized rating plan.

The product of an author’s work which is submitted to the publisher either in his own hand or typewritten.

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.

To make defective, especially by cutting off or defacing a part.

Marine Insurance
Insurance against certain perils or sea risks to which one’s ship, freight, and cargo (or some of them) may be exposed during a certain voyage or a fixed period of time.

Marine Risk
Perils of the sea.

Marine Syndicates
Groups of insurance companies providing ocean marine insurance. Such insurers are also actively involved in actual inspection and setting of standards for risks undertaken by them.

Pertaining to navigable waters.

Maritime Law
System of law specifically related to marine commerce and navigation.

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

A system of business activities which are designed to plan, promote, price and distribute want-satisfying products, services and ideas to target markets in order to achieve the objectives of both the consumer and the company.

Legal union of one man and one woman as husband and wife.

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.

Mass Merchandising
Whereby a group of persons insure with one insurer under the terms of a master agreement.

One who employs another and controls their conduct in the performance of that employment.

Master And Servant
This relationship exists where the employer has the right to select the employee, the power to remove and discharge him and the right to direct both what work shall be done and the manner in which it shall be done. This relationship is normally now called “employer and employee”.

Master Of A Ship
The captain.

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.

Important; necessary.

Material Change
A material change is any change within the control and knowledge of the insured, which arises after the policy has been issued, and serves to increase the chance of loss. The insured should report this to the insurer or its agents promptly. The insurer may return the unearned premium and cancel the policy, or retain the risk and advise the insured of additional premiums required.

Material Fact
A fact which, if the insurer knew about it, would cause it to decline the insurance altogether, or charge a higher premium for accepting it

Material Loss
For a negligence action to succeed, there must be a material loss.

Material Representation
A statement which is so important as to be the basis of an action if such representation is false.

Maximum Possible Loss
The largest loss which could occur under the circumstances.

Maximum Probable Loss
Largest loss which underwriter considers likely to occur, based on his experience and judgment

Mechanic’s Lien
Created by provincial statutes, a claim which secures priority of payment for work performed and materials furnished in erecting or repairing a building or other structure. Applies to the land as well as buildings and improvements erected thereon and covers material men, tradesmen, suppliers, and the like, who furnish services, labour, or materials on construction or improvement of property.

Mechanical Breakdown
A failure in the working mechanism of the machinery.

The materials, including diskettes, tapes and punch cards upon which data or information is recorded.

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

One who intervenes between parties in dispute with a view to reconcile them.

Medical Payments Insurance
Insurance coverage provided by most liability policies and which insures specified medical expenses of others regardless of insured’s legal liability.

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

Relating to the mind.

Mental Anguish
When connected with a physical injury, includes pain and accompanying feelings of distress, fright, and anxiety. In other connections, includes the mental suffering resulting from emotions including grief, severe disappointment, indignation, wounded pride, shame, public humiliation, despair, etc.

Mental Capacity or Competence
Relates to the nature and effect of one’s acts and business and the ability of a person to understand same.

Mental Incapacity
Exists when one is incapable of understanding and acting with discretion in the ordinary affairs of life.

Mental Shock
Sudden agitation of the mind.

Mercantile Risk
One having to do with the business of buying and selling merchandise.

Goods which merchants usually buy and sell.

One engaged in the buying and selling of goods.

Implied warranty under Sale of Goods Act requiring goods to be fit for the ordinary purposes for which they are to be used.

Merit Rating
A rating system in which the applicant’s loss experience is a factor in rate determination.

The insured or a partner of the insured or any employee who is duly authorized by the insured to have the care and custody of the insured property outside the premises.

One who brings parties together for the purpose of making their own contracts. Also, one who buys goods from a manufacturer and resells them at a higher price.

A superficial growth produced on damp or decaying organic matter. Also know as mold.

Mill Construction
Building construction characterized by thick masonry walls and heavy wooden floors. Frequently found in older factories and warehouses.

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

A person under the age of legal competence, usually 18 years of age.

Where bullion is coined into money.

The act of turning to a wrong purpose.

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

In “malicious mischief,” it denotes a wanton or reckless injury to persons or property.

Unlawful behaviour by a person entrusted in any degree: with the administration of justice, by which the rights of the parties and the justice of the, case may have been affected.

Delivery of mail, freight, etc. to one other than who is authorized to receive it.

An error in the description of the subject matter of a contract which is misleading in a material or substantial point

The improper performance of some lawful act.

Mislaid Property
Property which has been left in a certain place by an owner who cannot remember where he has put it

Meant to lead into error.

Wrong name.

A false statement by insured about a material fact made knowingly and with intent to deceive or which insured states positively as true, not knowing it to be so, and which has a tendency to mislead. One that would influence a prudent insurer in determining whether or not to accept the risk, or the rate to be charged for insuring such risk.

Mission Statement
The mission is the particular aim that sets a brokerage apart from other brokerages. The mission is the organization’s purpose of existence.

An unintentional act, omission, or error.

Gathering of many people acting in an unlawful, violent and disorderly manner. Synonymous with “riot.”

Mobile Home
A home which is factory built on its own chassis and which can be easily moved.

To alter or change.

Generally, having to do with money.

Coins and paper currency authorized by law which circulates as the medium of ex-change.

Money Order
A negotiable draft used by the purchaser as a substitute for a cheque. Issued. by banks, post offices, express companies, etc.

Montrose Chemical Theory
The continuous trigger theory, but add that all the events from the initial injuring event through the commencement of the lawsuits right up to the day of trial were triggering. This approach combined the continuous trigger approach and occurrence policies, which first came into effect during the course of the lawsuit, even though the loss was obviously known to both the insured and the insurer.

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

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.

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

Mortgage Clause
Clause in insurance policies that protects the interest of mortgagee.

Mortgage Insurance
Insurance policy designed to cover the balance due on a mortgage on the death or disability of the insured.

The one taking or receiving a mortgage.

The party to a mortgage who, in order to secure a mortgage loan, gives legal title or a lien to the mortgagee.

Motor Truck Cargo Policy (Carrier’s Form)
Covers goods of others while being transported on insured’s vehicles.

Motor Truck Cargo Policy (Owner’s Form)
Covers the insured’s own goods or goods of others for which he is responsible while being transported on insured’s vehicles, or by such other means as specified by the policy.

Movable Property
Property whose location can be changed.

Mufti-Peril Policy
Insurance contract which combines a variety of insurances, e.g., property, crime, liability.

Municipal Ordinance
A law or rule enacted by a municipal corporation for the proper conduct of its affairs, e.g., zoning, building codes.

Mutual Assent
The agreement of all parties to a contract to all its terms and conditions.

Mutual Insurance Company
Type of insurance company having no capital stock and in which the policyholders are the owners.

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.

Named Peril
Policy A policy of insurance in which the perils insured against are listed or named.

Natural And Probable Consequences
Those consequences that normally result out of certain acts and which a prudent person can anticipate as likely to happen again, all circumstances being the same.

Natural Disaster
Disaster caused by forces of nature, e.g., earthquake, lightning, tornado, etc.

Able to be navigated by ships and vessels.

Navigable Waters
Waters which afford a channel for the passage of ships and vessels engaged in useful commerce.

Adjacent, contiguous, abutting.

Those things that are indispensable for the sustenance of human life.

Meaning depends on context in which it is used. May import that which is convenient, indispensible, or an absolute physical necessity.

The omitting or failing to do a thing that can be done or is required to be done. May also denote an absence of care or attention in the doing or omission of a given act.

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

Negligence In Law
Such as that which grows out of failure to observe a duty prescribed by law.

Negligence Per Se
That which is self-evident, i.e., conduct which clearly was not that of a careful person.

Negligent Misrepresentation
Occurs when the person making the misrepresentation should have known, but was careless, about the truth of the representation.

Transferable by endorsement, including cheques, notes, stocks, bearer bonds.

Negotiable Bill
Bill of Lading in which terms call for goods to be delivered to bearer or to order of named persons.

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

Negotiated ADR
Negotiated ADR can be iterative and occur as part of other forms of dispute resolution. Critical to negotiated ADR is the authority or power to grant something to the other party that satisfies their need, whether expressed or implied.

Net Income
Income remaining after all expenses and deductions have been considered.

Net Lease
Lease in which, in addition to rent, requires the lessee to pay taxes, insurance and maintenance charges.

Net Line
The amount of liability the insurance company is prepared to expose to loss for its own account.

Net Loss
Actual loss sustained by the insurer after deducting recoveries, salvage, subrogation, and reinsurance.

Net Premium
Amount of original premium remaining after deducting premium refunds to the insured and reinsurance premiums.

Net Premium Earned
That 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 Rent
Basic rent charge plus additional monthly charges for taxes, utilities and maintenance.

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

New For Old
In marine insurance, a term referring to the practice of applying a depreciation discount to new parts or equipment that are used to replace old ones that have been lost or damaged.

Newly Acquired Automobile
A newly acquired automobile is automatically insured when it: (a) replaces an automobile described on the policy. (b) is in addition to others owned by the insured and which are all insured by the same insurer. (Not applicable in British Columbia).

Newly Acquired Location
Equipment and stock at any acquired location that is owned, rented or controlled by the insured in whole or in part or on vehicles within 100 meters of such location. This limit of insurance attaches at the time of the acquisition and extends for a period of 30 days or to the endorsement of this form adding such location whichever first occurs.

Next Of Kin
Those who are most nearly related to the decedent by blood. May include other persons who bear no relation of kinship at all, e.g., relationship existing by reason of marriage.

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.

Nominal Damages
A minimal amount awarded where there is no substantial loss or injury to be compensated, but where it is recognized that a plaintiff had a technical invasion of his rights, or in cases where there has been a real injury but the plaintiff failed to show its amount.

Not cancellable, so long as premium has been paid.

Materials which will not ignite or burn when subjected to fire.

Non-Concurrent Insurance
When two or more policies on the same risk do not provide identical coverage.

When carrier, vendor or bailee neglects, fails, or refuses to deliver goods.

A failure to reveal facts. If applicant for insurance does not disclose all material facts, he is guilty of non-disclosure and may risk having coverage voided.

A risk free from the average hazards of all classes of risk, or not involving the ordinary or average hazard of its class.

Streams or bodies of water not affected by tide.

That which is not capable of passing title or property by endorsement and delivery.

Non-Negotiable Bill
Document of title in which goods are consigned to named persons but is neither signed nor capable of transferring title in the good described in it.

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.

Failure to pay a debt when due.

Failure to perform an act agreed upon.

Non-Proprietary Insurers
Includes mutuals, reciprocal exchanges and miscellaneous co-operatives. They are organized for reasons other than profit. They are owned and controlled by their policyholders who have banded together to secure insurance at as low a cost as possible. No stock or share capital are involved.

Non-statutory Bond
Bonds not required by law but flow from the contract or agreement between the parties. Contract bonds used in the construction trade fall into this category.

Non-Waiver Agreement
An agreement signed by insured after a loss which allows insurer to investigate and determine amount of damage without such action being perceived as an admission of liability. Generally, used when the insured is in violation of a policy condition and there is some question about whether or not the insurer will pay the loss.

Failure or neglect to perform duties as agreed to.

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

Normal Course Of Transit
The orderly transit of merchandise from the point of origin to the final destination without interruptions or delays resulting from the action or inaction of any party at interest.

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 Abandonment
In marine insurance, a condition which must precede a constructive total loss. If the insured fails to give notice to the underwriter, the loss can be treated only as a partial loss unless an actual total loss is proven.

Notice of Accident or Occurrence
When an accident or occurrence takes place and it appears that it may involve liability against anyone insured by this policy under the coverage provided, written notice must be sent to us as soon as practicable.

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.

Notice Of Termination
Notice respecting termination of insurance contracts may be given by the insured or insurer and may be different for different types of policies. Terms of termination are contained in policy.

The process by which a property and casualty insurance company, with full disclosure by the transferee, accepts a new client in place of the original policyholder is not an assignment. It must be an amendment to, or rewrite of, the original policy. This is the case because in contract law a significant modification to an ongoing agreement. Novation is essentially a new contract, although it will usually be with the original parties and on the same subject matter. Novation, in certain instances, completely releases parties from their obligations under an existing contract.

Some thing which causes injury, especially to health or morals.

Nuclear Insurance Association of Canada
Provides nuclear property and liability insurance for risks in Canada.

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

Having no validity. When used in connection with “void” in a contract or statute, means “voidable.”

Numismatic Property
Numismatic Property including coin albums, containers, frames, card and display cabinets used in connection with such collections that are owned by or in the custody or control of the insured.


An affirmation of truth of a statement. One who wilfully asserts untrue statements commits perjury which is punishable at law.

To bind by obligation or promise; to assume a duty.

An undertaking to perform, whether it be imposed by law, promise, contract, relations of society, courtesy, etc.

Obligatory Treaty
Reinsurance contract under which the insurer must cede to the rein surer and the reinsurer must accept all risks covered by the treaty.

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

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

Offensive to accepted standards of decency.

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. See Functional Obsolescence.

Something which is no longer in use.

To block up or impede.

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

Person who has use, possession or control of a thing.

(a) Possession; use. (b) That which takes up most of one’s time and energies, e.g., business or employment.

Occupational Hazard
The risk of accident or disease which is associated with a specific occupation.

An occupant

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

Ocean Marine Insurance
See Marine Insurance.

A felony or misdemeanour in breach of a criminal law.

As relates to nuisance is synonymous with “obnoxious” and means objectionable, disagreeable, displeasing and distasteful.

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.

Person holding office of trust or authority in corporation, government, armed services, etc.

An official who represents citizens before the government.

Neglect to do what the law requires.

For all.

Omnibus Clause
In insurance, clause which extends coverage to other persons, e.g., the automobile policy which extends to cover any other person driving the vehicle with the insured’s consent.

On Board Bill
Bill of lading which shows that loading has been completed.

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.

Onus Burden of Proof.
See Burden of Proof.

Open Account
Credit extended to buyer which permits him to make purchases without a note or security, based on his past credit rating.

Open Bid
Offer to perform a contract together with the price, but with right to reduce the price to meet price quoted by others for same job.

Open Bid
A contractor’s bid in which he reserves the right to reduce his bid to compete with a lower one.

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

Open Credit
Line of credit which allows one to borrow or purchase to a set limit without having to post security or re-establish credit limit.

Open-End Credit
Credit plan whereby one pays a part of what he owes each month on several difference purchase, e.g., credit cards.

Operating Affiliation
Operating Affiliations are ways the brokerage can draw upon support from within the insurance industry to achieve its marketing and sales goals.

Operating Income
An insurance company’s net investment income plus net underwriting income in a specific time period.

Operating Ratio
An index of insurer’s current underwriting performance as based on combination of both the loss and expense ratios for a specified period.

Operational Values
Can be extrapolated from the day-to-day activities of the individual members of the brokerage. It is how we would describe an individual’s typical actions. Operational values are made evident by how we perform.

Oppression Actions
Permits shareholders, in addition to a number of other parties, to gain access to the corporation’s assets and, at times, to the directors.

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.

Spoken as opposed to written.

Oral Contract
Contract which depends on spoken words.

Order Bill
Bill of lading made to order which can be negotiated by any consignee presenting it.

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.

Equivalent of a municipal statute dealing with matters not covered by federal or provincial law, e.g., zoning, building safety, etc.

adj. Normal.

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.”

Ordinary Construction
Buildings having exterior bearing walls of non-combustible construction and roofs, floors and interior framing wholly or partly of wood or other com-bustible material.

Ordinary Life
Also called Straight Life or Whole Life, life insurance policy in which insured pays premiums as long as he lives and the insurer pays the face amount to the beneficiary upon the insured’s death.

Ordinary Negligence
The failure to exercise care of an ordinarily prudent person in similar circumstances.

Ordinary Payroll Expense
The entire payroll expense for all employees of the insured, except officers, executives, department managers, employees under contract and other important employees whose services would not be dispensed with should the business be interfered with or interrupted.

Any legal or commercial entity, e.g., corporation, government, business trust, estate, trust, partnership or association, etc.

Original Cost Method
Amortization of asset based on its cost, less salvage value.

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

Out-of-Court Settlement
Settlement which takes place between parties in a pending suit without being referred to the court.

Out-of-Pocket Expenses
Such expenditures as are usually paid for with cash.

Outboard Motor Boat And Outboard Motor Policy
Insurance policy covering boats, motors and equipment

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

When a risk is insured for more than its fair or reasonable value. See Double Insurance.

Overage Additional Premium
In marine insurance, the additional premium charged on an open cover declaration where the carrying vessel is outside the scope of the classification clause. It may also be applied to additional premium charged for breach of navigational warranties where the ship is more than 15 years old.

Costs not directly associated with producing goods or services, e.g., rent, property taxes.

Overlapping Insurance
When two different kinds of policies cover the same loss.

Load too heavily.

Overriding Commission
Commission which is in excess of that normally paid, usually to cover additional costs incurred in supervision and administration of others.

Overt Act
An open act from which criminality may be implied.

Beyond regular working hours.

To have a legal or rightful title to something.

One in whom ownership in vested.

The rights to use and enjoy property to the exclusion of others.


Property and Casualty Insurance Compensation Corporation. Membership in this industry-funded plan is a condition of licensing and the amount contributed by each insurance company is based on the total amount of direct premiums written.

A packet for transportation or commercial handling.

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

Packing List
Document which accompanies the package being shipped which details the contents, weight and other information.

Paid Losses
Losses actually paid by insurer during specified period of time.

Pain And Suffering
Physical discomfort and distress, as well as mental and emotional trauma recoverable as damages in a tort action.

Pair & Set Clause
Additional Condition contained in property insurance policies which slates that loss to only one item of a pair or set does not constitute loss or damage to the entire pair or set

Extension of a fire wall beyond the roof level.

Small package.

Parental Liability
If damage results from negligent control of parents over the act of their child, they may be held liable.

Pareto Principle (the 80:20 rule)
“A minority of input produces the majority of results.”

Not general or total.

Partial Disability
When injured party is unable to perform part of usual tasks of his job or is only able to perform labour of a less remunerative class than he performed before the injury.

Partial Loss
A loss under an insurance policy which does not either completely destroy or render worthless the insured property, or which does not exhaust the insurance limits applying thereto.

Partial Loss
In marine insurance, an injury to the vessel or insured property resulting in a loss that is not actually nor constructively total.

Whereby the insured participates in each covered loss incurred on a percentage basis, e.g., coinsurance, percentage deductible, etc.

Single or individual, as opposed to general.

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

Particular Average
A particular average loss is a partial loss of the subject matter insured, caused by an insured peril, and which is not a general average loss.

A member of partnership or firm.

Contract between two or more people to enter into a lawful business, with it being understood that there shall be a proportional sharing of the profits and losses between them.

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.

One who is bringing a suit, or against whom a legal suit is brought, i, e., a plaintiff or defendant.

Government grant to inventor which gives him exclusive right to make, use and sell his invention for a specified period.

A bailment of goods to a creditor, as security for some debt or engagement.

One to whom money is paid.

One who pays money.

Payroll Audit
When incorporated into policy, gives insurer right to audit insured’s payroll to determine the final premium due.

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

Fraudulent misappropriation of another’s property entrusted to one’s care.


Pecuniary Damages
Where loss or injury can be recompensed in money.

One travelling on foot.

Penal Bond
One guaranteeing payment of the stated penalty in the event of nonperformance.

The sum of money or bond limit which is available upon default of the principal.

Percentage of Completion Method
Accounting method used in construction in which profit or loss from work completed is calculated as a percentage of the total contract price.

In a contract, to fulfil it according to its terms.

The fulfilment of the terms of a contract or similar obligation.

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.

The cause of the loss, e.g., fire, hail, etc.

Perils Of The Sea
In marine insurance, hazards arising on navigable waters through natural forces such as abnormally heavy seas, high winds, etc.

Perimeter Protection
Refers to means used to secure access to the premises when the business is closed.

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

Subject to quick, natural decay, e.g., fruits, dairy products, meat.

Perishable Goods
Goods which quickly decay.

Continuing in the same state, lasting.

Permanent Injury
Injury that will continue for as long as one lives.

Permanent Life Insurance
Insurance which pays the sum insured on the death of the life insured.

Permanent Partial Disability
Condition which continues throughout the life of an injured party and which lessens his earning capacity but which is not so severe as to prevent him from working at a reduced efficiency or in another job function.

Permanent Total Disability
Whereby the injured party is not able to work at any gainful employment for the rest of his life.

Authority to do a thing.

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

n. Document that grants one the right to do something.

Perpetual Insurance
Coverage on real property which is unlimited in respect of time. Payment of a single premium pays for coverage throughout the life of the risk.

A human being, but in law may include a firm, labour organizations, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy, or receivers.

Personal Articles Endorsement
Covers personal property on worldwide basis.

Personal Chattel
Moveable things. Personal property other than real estate.

Personal Cheque
Cheque drawn on an individual’s bank account.

Personal Effects
Moveable property of any kind associated with a person.

Personal Injury
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 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.

Personal Property
Property belonging to insured other than real property.

Personal Property
Property belonging to insured, other than real property.

Personal Surety
An individual who acts as a surety or guarantor, as opposed to an insurance company.

Personal Tort
A tort which involves injury to a person, as opposed to property.

Physical Depreciation
Reduction in value due to actual wear and tear or physical dete-rioration.

Physical Harm
Denotes the physical impairment of the human body, or of land or chattels.

Physical Hazard
The various physical aspects of matters surrounding the insured premises or property which may improve or lessen the chances. – loss with respect to that particular risk, e.g., the use of volatile materials on the premises.

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.

Physical Protection
Locks, bars and screening as a first line of defence against intruders are a basic security requirement that can be used to provide an effective means of perimeter protection.

Physical Shock
A blow, impact, or collision, or the concussion caused by it.

One or more employees or others who patrol with signs at the employer’s business to publicize a labour dispute in an attempt to influence employees or customers to withhold their work or business.

To steal.

Generally, stealing of small items. In marine insurance, theft of the contents, in whole or in part, of a shipping package.

Pillage And Looting
In marine insurance, robbery of goods usually as part of war or civil uprising.

Pink Card
An Inter-Province Motor Vehicle Liability Insurance Certificate. In provinces where automobile insurance is provided by private insurers, a “pink card” is used to provide proof of financial responsibility.

(a) Robbery on the high seas. (b) Illicit reprinting and reproduction of a copyrighted thing.

Plain Language Policy
Insurance policy written in language that is easily understood. Technical terms are used only when required by law or when substitutions would be misleading.

One who brings a legal action against another.

Bailment of goods to a creditor as security for some debt.

Point Protection
Point or object protection provides direct security for individual items such as safes, vaults, chests, filing cabinets, display cases, and expensive equipment.

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

Policy Conditions
Conditions developed by insurer which describe the rights and duties of insurer and insured. See Statutory Conditions.

Policy Fee
Amount added to premium that reflects the various expenses associated with issuing the policy.

Policy Limit
Maximum amount the insurer is obligated to pay in any one occurrence or accident.

Policy Period
Duration of policy.

Policy Reserves
Reserve established by insurer against unearned premium.

Policy Territory
Geographic area in which damage or injury is covered under the policy.

Policy Year
Period which commences with the date of commencement or anniversary of the policy.

One to whom the insurance policy is issued.

Policyholder Surplus
In a mutual insurance company, the amount in excess of assets needed to meet future obligations to its policyholders.

To contaminate the soil, air or water by noxious substances and noises.

Group of insurers or reinsurers who write particular types of risks and share the premiums, losses and expenses.

Port Authority
Agency authorized by government to regulate and plan traffic through a port.

To occupy; to exercise physical control.

Having control or custody of anything which may be the subject of property.

One who has possession.

Post Indicator Valve (P.l.V.)
Valve used to control water flow to fire protection systems.

Post-Dated Cheque
Cheque which is dated after the date it is issued, and is payable on the stated date.

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.

Legal principle established in similar prior cases.

One who has gone before.

Preferred Risk
That risk considered to be better than the average risk on which the premium rate was based.

A preconceived opinion.

Estate including land and buildings thereon.

The money or consideration paid by the insured to the insurer for insurance pro-tection.

Premium And Dispersion Credit Plan
Plan which gives large commercial fire risks with more than one location premium credits that reflect hazard reduction stemming from the dispersion of risks and an efficient loss prevention program.

Premium Discount Plan
Discount plan for prepayment of premiums.

Premium Finance Plan
Plan that allows for payment of premium in instalments.

Premium Note
A promissory note given by the insured for part or all of the amount of the premium. Common to policies of Crop-Hail Insurance.

Premium Rate
Price per unit of insurance.

Premium Reserve
Reserve reflecting the unearned portion of a risk.

Premium Tax
Tax paid by insurer on gross insurance premiums sold in province.

Premium Volume Lapse Ratio
This measures the ratio of dollar premium volume of lapsed business during a period compared to a similar prior period.

Prepaid Freight
In marine insurance, freight paid by the shipper to the carrier when merchandise is accepted for shipment Not refundable even if the merchandise does not arrive at the intended destination

Period of time in which a claim or action may by brought by the insured.

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

Rule of law underwhich a fact is presumed true until proven otherwise.

Presumption of Liability
Assumption of who is liable in a given circumstance until proven otherwise.

Presumptive Disability
Assumption of total disability when there is loss of sight, hearing, speech or a limb.

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 any recovery is made from another.

n. Source of authority.

Principal Sum
Lump sum payable in the event of accidental death or accidental dismemberment.

Fundamental truth or doctrine.

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

Prior Insurance
Insurance coverage in force prior to current insurance.

Privacy Act
The purpose of this Act is to extend the present laws of Canada that protect the privacy of individuals with respect to personal information about themselves held by a government institution and that provide individuals with a right of access to that information.

Privacy, Right Of
The right of a person to be let alone.

Affecting private individuals as distinguished from general public.

Private Business
One in which the profit is for private benefit.

Private Carrier
See Carrier.

Private Carrier
Those who transport only in particular instances and only for those they choose to contract with.

Private Detective Bond
License bond guaranteeing compliance with provincial legislation and generally required of private detectives, locksmiths, security guards, etc.

Private Nuisance
Anything which through its continuous use or existence harms, incon-veniences or otherwise deprives another landowner of the enjoyment of his property.

Private Passenger Automobile
Generally, motor vehicles of private passenger, station wagon or van type.

Private Wrong
The violation of a private or public right which results in an injury to an individual.

Privity Of Contract
Relationship which exists between two or more contracting parties. Generally, a rule in law which prevents persons from benefiting from a “private” contract they had no part in effecting. Privity as a defence in tort action generally no longer viable with the enactment of warranty statutes, acceptance by provinces of strict liability and court decisions which have extended right to sue to others, e.g., third party beneficiaries, innocent bystanders.

Pro Rata

Pro Rate
To divide, share or distribute proportionately.

Pro-Rata Distribution Clause
Provides that the amount of insurance shall apply to each parcel of property in the proportion which the value of each bears to the total value of all insured property by the policy.

Probable Cause
Cause having more evidence for than against.

Probable Maximum Loss (P.M.L)
Under normal circumstances, the maximum amount of loss that can be expected.

Legal proceeding which proves deceased’s will to be valid or invalid.

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

An action at law encompassing the time from the filing of the complaint until the judgment is rendered.

One who sells insurance.

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

Product Liability Insurance
Insurance coverage designed to insure the legal liability of sellers and manufacturers for injury or damage caused by defective products sold or made by them.

Products Recall Expense Insurance
Covers costs of recalling products known or suspected to be defective.

Occupation requiring special, usually advanced, education and skill, e.g., accounting or legal professions.

Brokers are viewed as professionals who possess special skills or knowledge. The high standards required of other “professionals” are generally also imposed on insurance brokers by the courts.

Professional Liability Insurance
See Errors And Omissions Insurance/Malpractice Insurance.

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).

Progress Payment
Periodic payment made to contractor to cover cost of material and work completed as outlined in contract.

An assurance that something shall or shall not happen in the future.

Promissory Warranty
When contained in insurance policy, an assurance by the insured that certain facts or conditions pertaining to the risk insured against shall continue, or shall be done or omitted.

Act immediately.

Do something without delay and with reasonable speed. Depends on facts in each case, i.e., what is prompt in one situation may not be considered to be prompt in another.

Establishing a fact by evidence.

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.

Proper Care
The degree of care which a prudent person should exercise in a similar situation.

Everything which goes to make up wealth or an estate, tangible or intangible.

Property Damage
In commercial liability insurance policies generally defined as “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.”

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

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

Property Right
A right to a specific property, whether personal, real, tangible or intangible.

Property Torts
Those involving injury or damage to real or personal property.

Proportional Reinsurance
Arrangement wherein reinsurer receives a percentage of the risk, the same percentage of the premium, and is responsible to pay the same percentage of all losses.

Offer of insurable risk presented to underwriter for acceptance. Also, formal presentation made by agent or broker to client for purpose of soliciting insurance.

Proprietary Insurers
Private insurers that exist to make a profit. They may be either incorporated or unincorporated.


Business which is owned and controlled exclusively by one person.

See Prescription.

One who is a potential purchaser of insurance.

Prospective Rating Plan
Method of determining premium which is based on the loss experience of the previous period.

A risk geographically located in an area protected by afire department

Synonymous with “insurance”. Also used in reference to private and public protection afforded the risk, e.g., fire and police protection.

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

Provisional Premium
Not the final premium but that which is preliminary or subject to adjustment.

Statements in policy which explain terms of the contract.

Closest in causal connection.

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

Proximate Consequence Or Result
Result which happens typically in the ordinary course of things.

Proximate Damages
The immediate and direct damages and natural results of the act complained of, and such as are usual and might have been expected.

Pertains to that which results as a natural sequence with no other thing intervening.

Power to act for an other.

Regarding negligence, almost synonymous with “cautious.”

Common to all; open to common use; belonging to the people at large.

Public Adjuster
One who is employed by an insured to represent him in negotiations with an insurance company.

Public Adjuster
Independent adjuster who represents insured on a fee basis in claims settlement.

Public Building
A building and its property which are for the use of the public.

Public Business
A business that the public uses for which commodities are bought and sold in such manner as to affect the community at large as to supply, price, etc.

Public Contract
A contract in which there are public funds.

Public Highway
One controlled and maintained by public authorities for use by the general public.

Public Nuisance
Behaviour which unreasonably interferes with the health, safety, peace, comfort or convenience of the general public.

Public Policy
Legal principle by which it is unlawful to do anything that may be injurious to the public or be against the public good.

Public Wrong
The violation of public right or duty which affects the whole community.

(a) Printing and distribution of written materials. (b) In law, communication of libelous matter to a third person.

To penalize or punish.

Punitive Damages
Meant to punish the party that has caused the infringement of the other party’s legal rights. Awarded over and above compensation for monetary loss. Awarded when the wrong to the plaintiff was aggravated by violence, oppression, malice, fraud, or wanton and wicked conduct on the part of the other party. They are intended to solace the injured party for mental anguish, shame, or degradation caused by the other party.

Punitive Damages
See Damages.

Purchase Agreement
An agreement between buyer and seller stating the price and terms of the sale.

Pure Premium
That part of the premium needed to pay losses, excluding the portion required by the company for its expenses.

Pure Risk
That which involves the chance of financial loss but which does not, at the same time, offer a chance of financial gain.


An individual’s qualities which render him eligible to fill an office or perform a public duty.

Generally, term used to define character, nature and degree of excellence of an item.

Quantum Term
Used in adjustment of claims to mean amount or quantity.

Queen’s Bench
The English court of king’s bench during the reign of a queen.

Quick Asset Ratio
Also called “acid test,” ratio of cash, accounts receivable and marketable securities to current liabilities.

Quick Assets
Liquid assets which can be converted into cash without delay.

Quick Assets
An accounting term used to describe cash and receivables, including notes and sometimes marketable investments, which, as part of normal operations, will be converted into cash.

adj. Free from disturbance.

v. To leave.

n. Giving up one’s claim or title.

Quota Share
Reinsurer participates for a fixed percentage of all business covered by the treaty.

The premium required by an insurer to insure a particular risk.


Rain Insurance
Covers financial loss caused by cancellation of an outdoor event due to rain, e.g., fairs, outdoor concerts, etc.

Payment that releases someone or something from captivity.

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

Rate Making
The compilation and analyzing of data that will establish rates that accurately reflect the level of risk.

Rate Manual (Rating)
Insurer’s manual which details underwriting rules and rates for use by staff, agents and brokers.

In the law of principal and agent, the confirmation by one person of an act or contract performed on his behalf by another who at the time assumed without authority to act as his agent.

Rating Bureau
A non-profit organization of insurance companies formed to promulgate rates for its members and subscribers.

Generally, the number arrived at when one number is divided by another.

Real Chattels
Property that concerns real property.

Real Estate
Real property, consisting of land and anything permanently affixed to it, e.g., buildings, fences, and those things attached to the buildings, such as light fixtures, plumbing and heating fixtures.

Real Estate Bond
Guarantees real estate salespersons and brokers will perform their duties in good faith.

Real Property
Land and whatever is erected, growing or affixed to it.

Suitable under the circumstances.

Reasonable Act
That which reasonably can be required of a party.

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

Reasonable Force
That degree of force which is appropriate to protect oneself or one’s property, without being excessive.

Reasonable Man Doctrine or Standard
The doctrine states that the standard one must observe to avoid liability for negligence is that of a reasonable man.

Reasonable Time
Such time as may be agreed to after consideration of the nature, purpose and circumstances of each case.

Reasonable Time
Not defined in law but left to discretion of judge. Generally, such time as may be fairly and reasonably allowed after consideration of the nature of the act or duty, the subject matter, and the attending circumstances.

Discount or reduction in stipulated premium of policy, generally by agent or broker and intended as an enticement.

Armed and organized resistance to the laws or operations of the government

Written acknowledgement that money or goods have been paid or delivered.

A collectible.

A court-appointed person who manages property in litigation or the affairs of a bankrupt.

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.

Recipient Property
One upon which the insured is dependent to purchase its products or goods sold by it.

Shared mutually as between two persons.

Reciprocal Insurance
Insurance which is administered by an exchange in which each insured is the insurer of the other members of the plan.

The right to cancel a contract for certain kinds of default by the other contracting party.


n. Documents or data such as accounts, correspondence, memorandums, tapes, discs, papers, books, etc.

The amount of a. loss which an insurance company gets back from reinsurance, salvage or by subrogation.

Red Book
Listing of new, wholesale and average retail price used by automobile dealers, claims adjusters, etc., to establish market value of used automobiles. See Blue Book Value.

Redeemable Bond
A bond which may be called by the issuer for payment according to the terms of the bond.

One selected by appointed arbitrators to participate in the hearing and settling of a dispute.

Retention of clients over the longterm through exceptional service and commitment leads to positive word-of-month and referral business.

That portion of insurance premium which is returned to insured, normally as result of termination of policy or reduction in coverages.

Registered Cheque
Cheque purchased from a bank and drawn on bank funds, although not certified by the bank.

Registered Mail
Special type of mailing offered by Canada Post which provides for documentation of all activities related to such mailing.

Regular Course Of Business
Normal operations which are a part of a business.

Government agent responsible for control and regulation of an activity or industry.

To indemnify.

To re-establish to its former state, condition, or office.

(a) Restoring all of the insured’s rights under a policy which has lapsed or been cancelled. (b) Restoring the full amount of insurance or reinsurance once a claim has been paid.

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.

The insurer who is insured against loss under its policies.

An insurance carrier which insures insurers.

One person connected to another by blood or affinity.

n. Abandonment of claim to party against whom it exists.

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

For fraud purposes, means a belief which motivates an act.

Abandoning or forsaking a right.

The means by which a right is enforced or the violation of a right is prevented, redressed, or compensated.

At a distance.

Remote Cause
In the law of negligence, one which normally would not lead to the event which happened.

Remote Damages
The unusual and unexpected result which could not have been reasonably anticipated – a result beyond which the negligent party has no control.

Lacking a close connection between a wrong and the injury, the effect of which is to prevent the injured party from claiming compensation from the one who did the wrong.

Provision in Insurance Act which extends coverage to property which is necessarily and temporarily moved to a location not insured by the policy.

Compensation; salary.

In a contract, to begin again or continue the old contract in force.

Insurance certificate confirming insurance policy has been extended for another term.

Renewal Agreement
Provision in policy that insurer will renew policy for an agreed number of times.

Renewal Certificate
The form used to change the expiry date of the contract.

Renewal Ratio
A key measure for analyzing the brokerage’s effectiveness at creating and maintaining client relationships is the rate at which business is renewed.

Fee paid for use or occupation of property.

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.

The act of restoring a damaged structure or thing to a condition as close as possible to that in which it originally existed.

To substitute a thing with its equivalent.

Replacement Cost
Method Amortization of asset in which value is fixed in terms of replacement cost.

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.

Replacement Value
The cash value or cost to replace a thing.

A court action to recover goods or chattels that have been wrongfully taken or detained by another.

Replevin Bond
A bond executed to indemnify the officer who executed a writ of replevin and to indemnify the defendant or person from whose custody the property was taken for such damages as he may sustain. Such bond guarantees that the replevisor will have the property in the same condition to abide the decision of the court.

Reporting Policy
One wherein the insured must report existing values to the insurer at certain intervals. Normally used where stock values fluctuate significantly from month to month.

To recover goods sold on credit upon the buyer’s failure to pay for them.

A written or oral statement of fact made by insured in application for insurance to induce insurer to enter into contract.

One who represents others. Interchangeable with “agent”

To renounce a right or duty.

Esteem in which one is held, i.e., what people think an individual is and what they say about him.

To void a contract as if it were never in place.

Rescission of Contract
Undoing a contract from the beginning, either by mutual agreement, or by one party if legal grounds exist

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


A place of abode in which one has an intention to stay for some period of time, but not necessarily permanently.

Residence Employees
The provincial Worker’s Compensation Acts provides converge for the insured from actions initiated by residence employees, there is no coverage provided when other employees are injured in the course of their employment by the insured. To ensure proper protection is in place, farmers normally will purchase the Employer’s Liability Coverage Rider.

One who resides in a place.

Resident Agent
When Insurance Act requires that policies insuring property in a province be signed by an agent who resides in that province, such agent is deemed a “resident agent.”

Respondeat Superior
Legal maxim meaning that in certain cases the master is liable for the wrongful acts of his servant and a principal is similarly responsible for the wrongful acts of his agent.

Legally accountable. Also, regarding Financial Responsibility Laws,having ability to pay a sum for which he may become liable. In other contracts, one who is able to discharge an obligation.

Act of making good.

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

Retained Earnings
Profits which have not been paid out as dividends.

(a) In risk management, includes all means of generating funds from within the business to pay for losses. (b) Amount of liability the primary insurer retains for its own account, or that part not ceded to reinsurer.

To withdraw something.

Basically, reinsurance of a reinsurer.

A look backward.

Retrospective Rating
Method of rating which uses claims experience of insured during the policy period to determine final rate or premium.

Return On Investment
Money earned from invested money.

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

Revenue Bonds
Bonds issued for specific public purpose and repayable from income generated by the project, e.g., building a bridge, road, etc.

Revenue Stamps
Stamps affixed to deed representing a tax on sale of real estate.

Susceptible to being withdrawn.

Revocable Credit
A credit which can be cancelled at any time without the consent of.the person in whose favour it was drawn.

Revocable Letter Of Credit
Letter of credit which can be cancelled at any time.

To cancel, rescind or take back.

An attempt to overthrow the government. On a large scale, called a rebellion and, if successful, becomes a revolution.

An overthrow of the government.

Money paid or taken for doing some act.

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

Right Of Action
The right to bring suit against another for purpose of seeking a legal remedy or relief.

Right Of Way
An easement giving one the right to pass over another’s land. See Easement.

A public disturbance involving a group of three or more persons in which there is actual or threatened violence which results in injury or damage, or which represents a clear and present danger which would result in injury or damage.

The danger or hazard of a loss of the property insured. May also refer to a specific peril or property being insured.

Risk And Insurance Management Society (R.I.M.S.)
Organization dedicated to the advancement of professional standards of risk management.

Risk Classification
Risk classification refers to the grouping or classifying of risks according to established criteria which, in the large part, is based on their probability for loss as a class.

Risk Control
The objective of risk control is to reduce the frequency and severity of losses as much as possible with the resources available.

Risk Financing
Risk financing is concerned with paying the losses that inevitably occur. Risk financing can be divided into two groups, retention & contractual transfer.

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

Risk Manager
One who works with management to develop the most cost effective means in which to deal with loss exposures that could prevent the organization from achieving its goals.

Felonious taking of property from the possession of another against his will, ac-complished by means of force or fear.

A lodger.

Rotten Clause
In marine insurance, refers to the discharge of any obligations upon the insurer when a survey of the vessel shows it to be unseaworthy by reason of being rotten or unsound.

Rule of Precedent
In common law, the basic concept is that current court decisions must follow those made in cases having similar circumstances. This custom of standing by previous decisions is known as the Rule of Precedent.

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

Pertaining to the country, as opposed to the city.


In marine insurance, the deliberate casting away or destruction of property to prevent greater loss. General Average sacrifice is for the common good and saved interests make good the sacrifice in proportion to the saving enjoyed-Safe (a) A metal container that protects items of value. (b) Secure from danger.

Safe Burglary Insurance
Generally, insures loss of property from safe or vault, coincidental damage to premises and property and felonious removal of a safe from the premises.

Safe Deposit Box
A metal container in a bank in which a customer keeps valuable items. Generally, two keys are necessary to open the box, one is kept by the bank and the other by the customer.

Safe Driver Rating Plan
Merit rating plan for drivers of private passenger vehicles which as-sesses points for various traffic violations and accidents, the number of which are then used to assess amount of premium to be paid.

Safety Deposit Box Insurance
Insures against loss of specified property contained within a safety deposit box.

A fixed compensation paid regularly, usually on an annual or monthly basis, contrasted with wages that are normally paid on an hourly basis.

A transaction in which one person gives something to another for a price.

Fit to be sold; of merchantable quality.

Sales Tax Bond
Bond guaranteeing the principal will collect and remit sales tax to the government.

Salesmen’s Sample Floater
Insures samples of merchandise in the charge or control of the insured’s travelling representative

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 the loss. The insured may retain possession of the salvaged property, at which time the insurance company will deduct the salvage value from the amount of the claim paid.

Salvage Charges
The expenses and costs incurred in preserving the property which was in danger, usually borne by the insurer.

Salvage Value
The value of the asset remaining after its useful life has expired, commonly equivalent to scrap value.

Sample, Sale By
A sale at which the buyer sees only a sample of the merchandise, which creates an express warranty that all the merchandise will conform to the sample.

In a contract, that which would satisfy a reasonable person.

To comply with a demand, e.g., a judgment is satisfied when it is paid.

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

Schedule Bond
Protects against loss from dishonesty or fraud by named individuals or named positions.

Schedule Rating
Use of fixed standards of construction and protection to develop insurance rates.

Scheduled Coverage
When property is itemized on a policy.

Scheduled Property
Means of insuring property requiring identification of each item and limits applicable to each.

Latin, meaning “knowingly,” or having previous knowledge of the facts. Most commonly used to signify the defendant’s guilty knowledge.

Scope of Authority
Includes authorization conferred upon agent by his principal, as well as that which is apparent or implied.

Scope of Employment
Refers to all activities committed within the scope, actual or apparent, of one’s employment.

Hold in contempt.

Either a particular sign or the word “seal” to attest the execution of an instrument.

Sealed Bid
Offer submitted under seal to perform a contract together with the price, and which is not to be opened until all bids are opened and compared.

Sealed Bid
A method of bidding on a contract wherein the party submits a bid in a sealed envelope. All bids are opened at the same time, the contract generally being awarded to the party having the most favourable responsible bid.

Seasonal Risk
A risk which is only occupied for part of the year, e.g., summer dwelling, restaurant at summer resort, etc.

In marine insurance, a warranty of seaworthiness means that the vessel is properly constructed, prepared, manned, equiped and provisioned for the voyage, with a captain of general good character and nauitcal skill.

Secondary Liability
A liability which does not attach unless certain conditions are fulfilled, e.g., surety responsibility to obligee only upon default of the principal.

Secondary Liability
A contingent liability.

Something known to only one or a few and which is kept from all others.

To hide away. Action to put property out of the reach of creditors.

Evidences of debts or of property, e.g., stocks, bonds, notes, convertible debentures.

Security Dealer License Bond
Guarantees security dealer will comply with securities law and regulations.

In risk management, the arranging of an organization’s activities and resources so that no single event can cause simultaneous losses to all of them.

Taking of something from another person.

An underwriting term to describe the process of accepting or rejecting risks.

Assuming one’s own risk, usually by setting aside a fund to meet losses instead of purchasing conventional insurance.

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.

Self-regulation creates an environment which holds brokers professionalism and consumer protection as primary objectives. The advantages of self- regulation include: setting the educational and ethical standards required of members; establishing of authority for disciplinary action against members who breach the code of ethics.

Selling Price Clause
Clause which changes basis of settlement on insured’s stock from ACV to its selling price.

Semi-variable Expenses
Semi-variable expenses are those which may or may not continue during the period of the interruption. These expenses are difficult to quantify or predict.

Separability Clause
In contracts, clause providing that if one or more contract provisions are declared void, the balance of the contract remains in force.

In risk management, the dividing of an organization’s single asset or operation into two or more separate units.

One employed to perform service and whose conduct in performance of that service is controlled by the master. See Agent; Employee.

Service Contract
An agreement to maintain or repair a consumer product for a specified time period.

In zoning bylaw, provision regulating the distance from the lot line to the point where improvements may be constructed.

The process of adjusting a loss under an insurance contract. Also payment or discharge of an account.

Settlement Options
Alternatives offered to the insured or his beneficiaries when settling a loss.

Settling Agent
In marine insurance, an underwriter’s agent who is authorized to settle claims.

To cut off from something; to divide.

Capable of carrying on an independent existence.

Generally, more than two. Also, independent or severable.

Several Liability
Liability separate and distinct from liability of another.

Apart from others. The term “severally liable” usually implies that each one is liable alone.

A word of command.

Shipping Document
All papers which cover a shipment, e.g., bill of lading, letter of credit, certificate of insurance, etc.

Shipping Order
Shipper’s instructions as to disposition of goods found on copy of bill of lading.

A sudden agitation of the physical or mental sensibilities. See also Trauma.

Shock Loss
Larger than anticipated loss which may impact on an insurer’s underwriting results in a territory.

Illegally taking merchandise from a retail establishment

A method of temporarily supporting structures or excavations.

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.

Shut Down
To stop work, e.g., at a factory

Illness, affecting general soundness and health.

Sidetrack Agreement
One in which business agrees to assume liability of a railroad company for injury or damage resulting from use of railroad track constructed on the business’s premises.

The part of a public street or highway designed for the exclusive use of pedestrians.

Sight Draft
A draft that is payable when presented.

Sight Draft
Payable on presentation or demand.

To authenticate or execute a document by putting one’s name to it and includes impressions made by hand, printed, stamped, typewritten, photographed, etc.

The state of a person who refrains from speaking.

Silence, Estoppel By
Arises where one is under duty to another to speak or failure to speak is inconsistent with honest dealings.

Nearly the same; allowing for some degree of difference.

When two or more things happen at the same time.

Single Interest Policy
A policy with only one insured interest, used when goods are sold on credit or deferred payment plan to protect single interest of seller or when goods are financed, to protect single interest of finance company.

To place in a specific position.

Knowledge of an art, science or trade, including the ability to apply in practice in a proper and approved manner.

Spoken false and defamatory statements concerning another which are harmful to his reputation.

Small Claims Court
A special court which provides for informal and inexpensive adjudication of small claims, e.g., small debts and accounts.

Bringing in of goods which are either prohibited or for which no duty has been paid.

Social Insurance
A compulsory welfare plan which spreads the cost of benefits among the entire population rather than on individual recipients.

In a general sense, the community or public. Also, a group of people united together for some common purpose, e.g., Canadian Cancer Society.

Soft Market
A soft market is characterized by intense competition between insurers. As a result, rates tend to be usually low.


Sole Proprietorship
A business which is owned by one person who is responsible for all of its debts.

Try to obtain.

Business’s ability to pay debts when due.

Within a reasonable time. Sound adj. In good condition.

adj. in good condition

Special Damages
Awarded for actual out- of-pocket expenses the party has suffered as a result of the infringement of his legal right, e.g., medical bills.

Special Damages
See Damages.

Specialty Contractor
One engaged in specialized type of construction, e.g., asbestos removal, mining, construction of dams, etc.


A detailed statement of various elements, materials, dimensions, etc. involved.

State in explicit terms.


Speculative Risk
One which involves the possibility of either financial loss or gain.

Spontaneous Combustion
Self-ignition by the internal development of heat, e.g., damp grains, oily rags, etc.

One’s wife or husband.

Sprinklered Risk
Property which is protected from fire by a system of overhead sprinkler pipes.

A model accepted as correct.

Standard (ordinary) Bill to Lading
The bill of lading that reflects the amount for which the common carrier will be held legally liable under the tariff. This amount is arbitrarily established at a certain amount per kilogram/pound or parcel.

Standard Forms
Policy forms adopted for use by the leading insurance companies.

Standard Mortgage Clause
Clause designed to protect interest of 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 or similar circumstances. See Negligence; Reasonable Man Doctrine or Standard.

Standing Charges
In business interruption insurance, means those expenses which would not ordinarily reduce during the period of indemnity provided by the policy.

n. In its largest sense, a “state” is a body politic or a society of men.

v. To express in writing or in words.

A declaration of fact.

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.


Statutable, Or Statutory
That which is governed by statutory law, as opposed to the common law or equity.

n. An act of the legislature. Also refers to legislatively created laws as opposed to court decided or unwritten laws. See Common Law.

Statute Law
The written law, created by federal and provincial legislation and which supersedes or amends the common law.

Statute Of Limitation
Prescribes the periods within which actions may be brought or within which certain rights may be enforced.

Created by a statute.

Statutory Bond
One that meets requirements of statute.

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. See Policy Conditions.

Statutory Damages
Damages resulting from statutorily created causes of action.

Statutory Law
Body of law created by acts of the legislature.

Statutory Obligation
An obligation which arises out of a statute.

Statutory Penalty
Penalty imposed against one who commits a statutory violation.

The felonious taking of personal property of another without his consent, and with intent to keep or make use wrongfully.

Step Licensing
Multi-level broker licensing system used in some provinces.

A material requirement in an agreement.

A merchant’s or tradesman’s goods 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 and similar property belonging to others which the insured is under an obligation to insure or for which he is legally liable. See Inventory.

Stock Company
Company owned by investors or stockholders who assume the risks of profit or loss.

Stock Reporting Policy
See Reporting Policy.

See Stock.

Property of another taken by a wrongful or dishonest act.

Safekeeping of articles and goods in a warehouse or other depository.

v. To keep merchandise safe, so as to ensure its return in same condition as when received.

In maritime law, arranging the cargo of a ship so as to protect goods being transported from damage from friction, bruising or leakage.

Straight Bill
Bill of lading which stipulates that the goods are to be delivered only to the named consignee.

Straight-Line Depreciation
See Depreciation.

Straight-line Method
The cost or other basis of the asset, less its estimated salvage value, if any, is determined first; then this amount is distributed in equal amounts over the period of the estimated useful life of the asset.

In maritime law, the running aground of a vessel.

Governed by exact rules.

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

Strict Liability
See Liability.

Strict Tort Liability
See Strict Liability.

When workers quit their work for the purpose of compelling their employer to accede to demands which he has already refused.

Strikes Cover
In marine insurance, usually insures damage caused to insured property by strikers, locked-out workers and persons involved in a labour dispute.

Structural Alteration Or Change
A major change, usually involving considerable expense.

A combination of materials to form a construction for occupancy, use or ornamentation whether installed on, above, or below the surface of a parcel of land.

Structured Settlement
One especially designed and which payments are made in regular instalments for a fixed period of time or for the life of the claimant, e.g., annuity.

One who is responsible for only a portion of the job.

One appointed by an agent of a principal to perform functions undertaken by the agent, and for whose conduct the agent is primarily responsible.

One who undertakes a specific part of the work undertaken by the general contractor, e.g., roofer, electrician.

Subdivision Bond
Provides guarantee to municipality that streets, curbs, sewers, gutters, etc., will be constructed and paid for by the developer.

Subject To
Synonymous with “provided” or “provided that.”

One in which tenant grants interests in leased premises less than his own, or reserves to himself reversionary interest in term.

Leasing of all or a part of his premises by lessee during the balance of his lease term. See also Sublease.

Subordination Agreement
An agreement by which the surety company ensures the bonded party’s financial obligation to it has legal priority over the debt the company owes to its shareholders.

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

Subscribing Companies
Insurance companies participating in a subscription policy.

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

Following in time.

Damage suffered by property due to movement of land beneath it, excluding earthquake, e.g., landslide.

Under another’s control.

Substandard Risk
Below average risk which may be rejected by insurer or, if accepted will command a higher rate.

Having considerable value or importance.

Substantial Completion
A contract which is near completion.

Substantial Performance
Exists where a contract has been honestly and faithfully performed in its material and substantial particulars.

Relating to what is essential.

One who subleases from an original lessee.

The passing of property under the law of descent and distribution.

One who follows.

Of like kind.

Unforeseen; occurring unexpectedly.

Sudden Emergency Doctrine
Provides that when one is placed in position of sudden emergency or peril other than by his own negligence, he shall not be held to same degree of care and prudence as one who has time for thought and reflection.

To begin and carry out a legal action against another. See also Suit.

Sue And Labour Clause
Clause requiring insured to do whatever is reasonably necessary to recover insured property after a loss.

To permit

A proceeding in a court of law brought by one person against another for redress of an injury or enforcement of a right. See also Action; Proceeding.

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

Superintendent of Insurance
One appointed by the government to regulate insurance within that jurisdiction. Also Superintendent of Financial Institutions in some provinces.

n. One authorized to command.


Superseded Suretyship
In policies or bonds insuring employee dishonesty, an agreement by current insurer to cover losses which occurred under a previous bond or policy but which are not recoverable under such bond or policy because of expiry of the discovery period.

Superseding Cause
Something that comes between the initial happening and the ultimate effect which renders the initial happening harmless.

To oversee.


Includes all those who produce and distribute consumer products, including manufacturer, component supplier, wholesaler, distributor, and retailer.

Supply Bond
Guarantees the performance of a contract for the furnishing and delivery of supplies and materials.

Supporting Business
The existence of other insurance policies the applicant has with the same insurer.

Latin. Above.

One who guarantees to pay money or to do any other act in event that his principal fails therein.

Surety Bond
See Bond.

Surety Company
A company which, for a fee, assumes the responsibility of a surety on the bonds of officers, trustees, executors, guardians, contractors, etc.

Suretyship, Contract Of
A contract whereby one person guarantees the performance of another. See Surety.

Surplus Insurer
only cedes to reinsurer when the amount of the risk is more than it wishes to retain for its own account.

Surplus Line
A line for which insurance is not readily available in the regular market.

Surplus Reinsurance
A form of reinsurance in which sums over a certain amount are des-ignated to the reinsurer.

Surplus Treaty
A form of proportional reinsurance treaty in which an insurer cedes to the reinsurer only when the amount of the risk is more than it wishes to retain for its own account

n. In insurance law, refers to application for insurance containing questions asked by insurer and answers of insured.

In marine insurance, the adjuster.

Temporarily discontinue with expectation of resuming.

Take an oath.

To cheat and defraud


Association of companies or individuals formed for the purpose of transacting insurance. See Lloyds of London, Lloyds Underwriters.


T.R.A.C. Report
This report provides an eight point analysis of the financial strengths of private insurance companies and is available on a subscription basis.

Real, having physical form.

Tangible Property
All physical property, both real and personal.

Tangible Property
Property which may be felt or touched, either real or personal.

Tangible Ratio
The tangible ratio is a measure of efficiency in the employment of tangible owner’s equity in the operations of a brokerage.

(a) Minimum rate made and published by a recognized rating bureau. (b) Public document outlining services of a common carrier being offered, rates, regulations, etc. relating to those services.

Tax Lien
A government lien on real estate which may be foreclosed when taxes are not paid.

Legally assessable.

Technical Battery
When a health professional during the course of treatment exceeds the consent given by a patient

A violent storm.

Lasting for a short time only.

Temporary Disability
One which lasts a short time as opposed to one that will last for life.

Temporary Location
Equipment and stock other than at a specified location except while in transit, but there shall be no liability under this item at any location owned, rented or controlled in whole or in part by the insured.

Temporary Substitute Automobile
A “temporary substitute vehicle” is one which is temporarily being used as a substitute for the automobile described on the policy. It cannot be an automobile owned by persons living in the same dwelling, nor can it be another owned by the insured. It qualifies as a temporary substitute automobile only if the described automobile cannot be used, because of its breakdown, repair, servicing, loss, destruction or sale.

One who temporarily uses and occupies real property owned by another.

Tenant’s Improvements
See Improvements and Betterments.

Tenant’s Policy
Generally, policy insuring property and liabilities exposures of person who does not own his own home.

Offer to perform combined with demonstrated ability to carry out the offer and production of subject matter of tender.

A period of time for which a policy or bond is issued.

Term Insurance
Also, temporary life insurance. Coverage is provided for a stipulated period of time, e.g., five years, .with the sum insured being paid on the death of the insured should it occur during that term.

To end.

Legally, expiration of a policy by lapse of the policy. In practice, insurance policies provide own terms for termination.

The systematic use of terror. A means of coercion.

One who dies leaving a will.

See Testate.

Oral evidence given under oath by a competent witness.

The taking of property without the owner’s consent.

One who steals.

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

Third Party Release
Between the insured and a third party.

A declared intent to cause injury or damage to another’s person or property.

Three D Policy
See Comprehensive Dishonesty, Disappearance and Destruction Policy.

Three elements of every tort action are:
Existence of legal duty from defendant to plaintiff, breach of duty, and damage as proximate result.

Through Bill
Bill of lading issued by a carrier from port of loading to port of destination (whether railroad, shipping line, airline) for a voyage requiring on carriage and involving at least one trans shipment which might be facilitated by other transport means. Trans shipment costs/freight is normally included in the fixed rate originally agreed between shipper/carrier. The issuer of the bill of lading may be responsible for the goods throughout the voyage or for only one leg acting as agent for the on-carriage.

Through Bill Of Lading
Bill of lading used when more than one carrier is required for shipment of goods.

The sea’s ebb and flow.

“Time” is expressive both of a precise point and of an interval between two points.

Time Bill
A bill which contains a date on which payment must be made.

Time Charter
When vessel is leased for a specific time rather than for a specific voyage.

Time Charter
A contract in which the owner leases his vessel or part thereof to another for a specific time or purpose, all the while retaining operation, control, and use of the vessel himself.

Time Draft
Payable in specified number of days after sight or after presentation for acceptance.

Time Draft
See Time Bill.

Time On 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.

In marine insurance, a policy in which the risk to the insurer is limited to a fixed period of time.

Document evidencing just possession of one’s property.

Title Insurance
Insures loss from a defect or failure of title, or from enforcement of liens existing against property at time of the insurance.

To endure.

n. Money paid for the use of something, e.g., bridge or road toll.

A legal wrong, other than breach of contract, for which the court will provide a remedy in the form of a suit for damages.

One who commits a tort, a wrong-doer.

Used to denote fact that actor is subject to liability under the principles of the law of torts.

The entire amount.

Total Disability
A disability which prevents an employee from doing the acts required of him in his usual job, whether temporary or permanent.

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.

Towing ships and vessels, usually by means of a tugboat.


Trade Fixtures
Articles attached to rented premises by tenant to be used in connection with his business.

Trade Secret
That which is used in one’s business to give it a competitive advantage over other businesses, e.g., formula, pattern, device, etc.

Any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others.

The names or titles lawfully adopted and used by those engaged in trade and who are capable of suing and being sued.

A vehicle drawn by some independent power.

Usually, a copy of a trial or other proceeding.

When applied to certain instruments, indicates that they may pass to another, carrying all the rights of the original holder.

Transportation of goods orpersons from one place to another.

v. To convey from one place to another.

Transportation Insurance
Insurance coverage designed for owners and carriers of goods in transit.

To snare. Denotes an intent to cause injury.

A physical injury or a psychologically damaging emotional experience.

Agreement between an insurer and reinsurer.

Treaty Provides
for automatic reinsurance without the insurer having to submit each risk to reinsurer.

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

Trespass To Land
One is guilty of trespass when he intentionally intrudes onto the land of another, or is negligent, or engages in some abnormally dangerous activity. See Nuisance.

One who intentionally enters another’s property without right or permission.

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

Of little importance. True Correct.

True Copy
Not necessarily an absolutely exact copy, but one correct enough so that anyone can understand it.

Trust Fund
Money or property held by a trustee for the benefit of another.

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


Underwriters’ Adjustment Bureau Ltd.

Underwriters’ Laboratories of Canada.

Uberrima Fides
Denotes the perfect good faith with which an insurance contract must be made, concealing nothing, e.g., the insured must observe the most perfect good faith towards the insurer.

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

A third party appointed to make an independent judgment in a dispute in which two or more arbitrators cannot agree.

Something which is done without authority.


Unavoidable Accident
One resulting without fault and which could not be foreseen and prevented by using ordinary diligence.

Unavoidable Cause
A cause not reasonably anticipated under the circumstances, and whose effects, under similar circumstances, a person does not and would not ordinarily avoid.

Unavoidable Dangers
In marine insurance, unavoidable dangers of the river includes those not preventable by the vessel’s operators.

Uncompleted Work
Work which is a part of the contract and which has not yet been completed.

In contract law, the absence of meaningful choice on the part of one of the parties. Also, a contract containing terms which are unreasonably favourable to one party.

Not able to be controlled.

Under Insurance
Insurance coverage which is inadequate for the value of the property or other exposure being insured.

Under The Influence Of Intoxicating Liquor
Any condition where intoxicating liquor has impaired the ability of the driver to operate his automobile in the manner that an ordinary, prudent and cautious man, in full possession of his faculties, using reasonable care, would operate or drive under like conditions.

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 insurance limit of the insured’s policy and that carried by the motorist at fault.

Amount of insurance on a risk which attaches before the next higher excess layer of insurance or reinsurance attaches.

To know.

In the law of contracts, refers to an agreement concerning subject matter and terms.

In a contract, means the same as “it is agreed.”

To assume an obligation.

A promise.

To insure. See 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’ Adjustment Bureau Ltd. (U.A.B.)
Develops and maintains professional claims and related services throughout Canada.

Underwriters’ Laboratories of Canada (U.LC.)
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.

Underwriting Profit (or Loss)
The difference between premiums generated and losses and expenses incurred is the company’s underwriting profit or loss.

Undisclosed Agency
When an agent deals with a third party without notifying that person of the agency, a state of “undisclosed agency” exists.

Undisclosed Principal
If an agent is acting for a principal, and the other party is not aware of it, the principal is “undisclosed principal.”

Unearned Premium
Premium which must be returned to insured upon policy cancellation.

Unearned Premium
See Premium.

Unearned Premium Reserve
See Premium Reserve.

Unemployment Insurance
Insurance plan which collects premiums from employers and employees to fund unemployment payments and benefits.

Plain and clear.

Not according to business or professional standards.

Without warning.

Term In insurance, time remaining in the contract.

Not finished.

Not qualified for a particular use or service.

Not expected. Uniform Unvarying standard.

Unidentified Automobile
Is one with respect to which the identity of either the owner or driver cannot be determined.

Uniform Provision
Wording in certain types of policies which is set out by law and which is standard for all such policies, e.g., certain provisions common to automobile policies.


Unilateral Mistake
In a contract, a mistake or misunderstanding made by one of the parties but not the other.

Uninsured Automobile
Is one in which neither the owner nor driver has applicable liability insurance. This does not include an automobile owned by or registered in the name of the insured or their spouse.

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

Not understandable.

A single thing of any kind.

Unknown Persons
Those whose identities cannot be determined.

That which is prohibited by law.

Unlawful Act
Any violation of a law.

Unlawful Assembly
A meeting of three of more persons with a common plan which, if carried out, will result in a riot

Unlawful Entry
A peaceable entry upon lands but which is accomplished by means of fraud or some other wilful wrong.


Unlicensed Insurance/Reinsurance
Insurance placed with an insurer not licensed to transact business in that jurisdiction.

Unliquidated Claim
A claim which is in dispute or which has not been determined either as to liability or damages.

Unliquidated Damages
Damages which have not yet been determined.

Discharging of cargo.

Unnamed Insured
One who although not named on the policy, is covered by it

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.

Having no precedent or example.

Unprofessional Conduct
Conduct considered to be immoral, unethical or dishonourable.

Property is “unprotected” when it is located in an area not regularly serviced by a fire department.


Unruly And Dangerous Animals
In law, denotes animals that are likely to injure other domestic animals and persons.


A vessel not able to withstand the perils of an ordinary sea voyage.

Inaccurate, but not necessarily wilfully so.


Unwritten Law
That portion of the law which has never actually been enacted in the form of a statute or ordinance, e.g., general customs having the force of law.

Maintenance and repair.

Belonging to a city or town.

Uniform practices followed in certain lines of business or professions.

v. To employ.

n. To employ for a given purpose.

Useful Life
For depreciation purposes, an estimate of an objects useful life.

Capabilities for use, both future and past


Usual Place of Abode
With reference to serving a summons, denotes the place where the defendant is actually living at the time of the service. See Domicile, Residence.

Utility Bond
Guarantees utility bills will be paid.

Utmost Care
Synonymous with “highest care.”

Utmost Good Faith
See Uberrima Fides.

To offer a forged instrument as one that is genuine, whether accepted or not.


A place or position which is empty or unoccupied.

Empty of contents. Implies abandonment and nonoccupancy for any purpose. In insurance, when the terms ‘vacant’ and “unoccupied” are used together, “vacant’ means empty while “unoccupied” means lack of usual presence of human beings.


To sanction, affirm.

Of considerable worth.

Valuable Consideration
Consideration, such as money, upon which a promise may be founded, which entitles the promisee to enforce his claim against an unwilling promisor. See Consideration.

Determining the worth of a thing.

Valuation Clause
In marine insurance, a clause wherein the insurer and the insured agree on the value of the insured property in advance of any loss to it.

Valued Bill of Lading
When the Standard bill of Lading does not accurately reflect the value of the property being transported, the owner can negotiate a new bill of lading with the carrier. The owner will pay an additional transportation rate or fee when the carrier’s liability is increased in this way.

Valued Policy
One in which the insured and insurer agree as to the value of property insured in advance of any loss to it, such amount to be paid in the event of a total loss of the covered property.

Wilful destruction of property.

Every device which transports people or property upon a highway.

Vehicular Homicide
Illegal operation of a motor vehicle resulting in death of another.

n. (a) A business speculation. (b) In marine insurance, an ocean voyage.

Spoken words.

Answer rendered by jury concerning matters given to them for their deliberation.

Prove to be true.

A craft used for navigation on water.

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


Propensity The tendency of an animal to do an act which could endanger the safety of persons and property of others.

One who is the object of a crime or tort.

Extreme, sudden or unjust physical force.



Under Occupiers’ Liability Acts, a person who is invited or permitted by the occupier to be there or is permitted by law to be there.

To destroy or annul; to make void or voidable.

The endeavour on which one spends most of his time and out of which he makes his living.

Having no legal force or binding effect.

Void Contract
One which lacks some essential element which makes it unenforceable at law.

That which is capable of being declared void.

Voidable Contract
A contract which can be voided because of the wrongdoing of one party, but only if the wronged party agrees that it should be voided, e.g., contract between infant and adult is voidable only at election of the infant.

Volenti Non Fit Injuria
To one consenting, no wrong is done. See Assumption of Risk.

Done with intention and free choice.

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.

In maritime law, the sea route taken by the vessel. Term also includes the enterprise entered into.

Voyage Clause
In marine insurance, clause stating the number of trips or period of time forming one voyage.


Worker’s Compensation Board

Synonymous with betting and gambling.

All types of remuneration one receives for personal services, including salaries, commissions, vacation pay, dismissal wages, bonuses and reasonable value of board, rent, housing, lodging, payments in kind, tips, etc.

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.

v. To voluntarily give up a right.

The unilateral and voluntary relinquishment of a known right.

Waiver of Co-Insurance
A clause contained in commercial property insurance policies which provides that the coinsurance penalty will not be applied in situations involving small losses even though insured may not be in compliance with coinsurance requirements, e.g., penalty waived for losses which are less than 2% of amount of insurance and less than $5000.

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.

Reckless disregard of the safety or rights of others.

Wanton Act
An act which evinces a reckless disregard to the life, health, reputation or property rights of another.

Armed conflict carried on between nations, states, or rulers, or between citizens in the same nation or state.

War Exclusion Clause
In marine insurance, exclusion which relieves the insurer of liability for loss caused by war.

A structure used to hold goods, stores or wares.

Warehouse and Customs Bonds
Guarantees payment of customs duties.

Warehouse Receipt
A receipt issued by a warehouseman for goods received for purpose of storage.

One who is in business of receiving and storing goods of others for compensation.

Warehousemen’s Lien
Legal right of warehouseman to retain possession of goods until storage charges have been paid.

A caution, e.g., labels affixed to potentially dangerous products, drugs, tools, etc.

v. In contracts, to promise that certain facts relating to the subject matter are or shall be as represented.

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

One who guards, patrols and oversees property.

Bill of lading issued by a carrier showing the merchandise to be transported and shipping instructions. In the event of a claim, it constitutes the written description of the shipment.

Wear and Tear
Deterioration caused by ordinary and reasonable use of the subject matter.

Seven consecutive days, sometimes stipulating beginning with Sunday and ending with Saturday.

White-Collar Crimes
Non-violent crimes committed by corporations or individuals including theft or fraud and other violations of trust committed in the course of the offender’s duties.

Whole Life
See Ordinary Life.

One who sells to a retailer or jobber as opposed to consumers.


A woman married to a man.

Wild Animals
Animals which cannot be tamed.


Wilful And Malicious Injury
Injury resulting from an intentional act without just cause or excuse.

Wilful and Wanton Act
Act which is negligent and exhibits conscious disregard for the safety of others

Wilful and Wanton Injury
Injury resulting from act knowingly and intentionally committed or committed under circumstances characterized by reckless disregard of safety of the victim.

Wilful Neglect
Suggests an intentional negligence.

Wilful or Wanton Negligence
Failure to exercise ordinary care to prevent injury to a person who is in danger.

Wilful Tort
Intent to injure.

Wilful Tort
See Intentional Tort.

Wilful, Wanton Or Reckless Negligence
When one intentionally acts unreasonably in disregard of a risk known to him or which is obvious and so great as to make it highly probable that harm would follow.

Wilfully and Knowingly
An act is done “wilfully and knowingly” when the person deliberately intends to do it and knows the nature of the act.


Wind Up
The action of settling accounts and liquidating the assets of a business in order to dissolve it.

To take away something one has previously enjoyed.

To keep in one’s possession that which belongs to another.

Without Delay
At once Also within the time allowed by law.

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.

All forms of physical or mental efforts required to obtain some object other than recreation or amusement

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

Workers’ Compensation Plan
Plan funded by employer contributions to cover compensation to employees injured in accidents while on the job.

Working Capital
The difference between current assets and current liabilities.

Mill, factory or establishment that performs industrial labour.

The value of a thing.

Having no value.

To destroy.

A court order requiring a specified act be done.

To underwrite or accept an application for insurance.

To remove bad debts from books of account.

Denotes a document as opposed to spoken words.

Written Law
Statutory law.

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

A violation of the legal rights of another.

One who commits an injury; a tort-feasor.

Injurious; infringement of a right.

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

Wrongful Conduct
Conduct which contravenes some legal duty.



Twelve calendar months.

To relinquish.


Dividing of a city into districts by legislative regulation and making of regulations relating to structural and architectural design, use of buildings within designated areas, etc.

Zoning Permit
Document issued by government authorizing a parcel of land to be used for a purpose which is consistent with zoning regulations.

Leave A Comment

shadow graphic
Caring for your tomorrow, Today! Email Us Call 1-855-236-5644
Go to Top