LAPSE - The termination of a policy because of failure to pay the premium.
LAST CLEAR CHANCE DOCTRINE - This is a doctrine which, in effect, states that one party, even though technically and legally correct in his position, could have, by vigilance, noted the impending danger or accident caused by the other party's negligence and taken action in time to avoid the injury or accident. An example would be a locomotive engineer proceeding down the railroad right-of-way notices an individual trespassing on the railroad tracks several hundred yards up ahead. The engineer has the legal right-of-way and up to this point, has the right to continue the movement of his train forward. The individual on the tracks is a trespasser and has no legal right. In many states, under the last clear chance doctrine, the locomotive engineer would be held responsible if he failed to take whatever action he might successfully have taken to prevent injury to the trespasser.
LEASE - A contract in writing whereby a person, having legal right to land or property, conveys or rents a portion of this estate to another.
LEASEHOLD INSURANCE - Insurance for the owners of property that is leased to others against the profit through termination of the lease by fire or other peril.
LEASEHOLD INSURANCE COVERAGE FORM - A commercial property coverage endorsement used to insure an insured tenant's interest in a favorable lease under which the rent paid is less than the rental value of alternative premises. It pays the difference between the rent paid and the rental value if the lease is canceled because of property damage. LEGAL RESERVE - The minimum reserves that are required under the jurisdiction laws in which an insurer operates.
LESSEE - A person who is granted a lease, also known as a tenant.
LESSOR - The person who grants the lease, also known as the landlord.
LIABILITY INSURANCE - The insurance that pays for loss of an insured arising out of his own responsibility, due to negligence.
LIABILITY LIMITS - The sum beyond the liability which the insurance company does not protect.
LIBEL - Any malicious writing expressed either in printing, writing, picture or any effigy. Any act, other than spoken words, which makes a person look bad or ridiculous. An act which diminishes one's reputation.
LIMIT OF LIABILITY - The maximum amount which an insurance company agrees to pay under an insurance policy.
LITIGATION - This is a law suit, a contest in court, designed to resolve a controversy between two or more parties, or between the state and one or more parties. Each side to such a contest is permitted to present its evidence and to argue is case. LLOYD'S - A broad term used to designate a group or groups of individuals, not insurance corporations or companies, who act as underwriters and who, in effect, insure individuals wishing to place large insurance risks.
LLOYD'S BROKER - A person with the authority to negotiate insurance contracts with the underwriters on the floor at Lloyd's.
LOCAL AGENT - This is the person who sells an insurance policy for a company.
LOSS - Any reduction in value of an item described in an insurance policy for a company.
LOSS OF INCOME INSURANCE - Insurance paying loss of income. (See Business Interruption Insurance.)
LOSS OF SERVICES - A loss sustained by one who is entitled to the services of another. For example, in the wrongful injury to a wife or minor child, the parent or husband might be entitled to the value of the wife's or child's services from the party who committed the wrong. (See also "Consortium")
LOSS PAYABLE CLAUSE - A clause in an insurance contract providing for payment of loss or claim for which the insurance company would normally owe the insured, to someone other than the insured, such as a finance company which might be paid so as to protect its interest in a financed car. MALPRACTICE - This is professional misconduct or lack of ordinary skill on the part of an individual, such as a doctor or dentist. Specific malpractice insurance is written to cover the risk occasioned by such professional shortcoming.
MANUSCRIPT POLICY - Usually written for larger or unique insureds, this form of policy is considered "non-standard" inasmuch as it contains policy language negotiated by the parties that is designed to meet the coverage needs of the insured.
MARINE INSURANCE - This form of insurance coverage is primarily concerned with protection of goods in transit, such as cargo on ships, etc.
The insurance adjuster generally refers to this as med-pay or MPC
(Medical Pay Coverage). It is that portion of the insurance policy
which provides for the payment of medical expenses for injuries
sustained in an accident where payment is made to the insured or to
others specifically described in the insurance policy. In
general, it refers to payments to the insured people on the
insured property or people riding in the insured vehicle etc.
MERCANTILE ROBBERY POLICY - A policy that provides Inside Holdup Insurance, Outside Holdup Insurance and Messenger Robbery for stores, offices and other places of business.
MERCANTILE SAFE BURGLARY POLICY - This policy was made for the loss of insured property from within a vault or safe by burglary. It provides coverage for a variety of property. MIDI TAIL - An automatic five-year extended reporting period which allows for the making of claims the expiration of a "claims-made" liability policy. This only applies to claims that were reported no later than 60 days after the end of the policy.
MINI TAIL - An automatic 60-day extended time to report which allows for the making of claims after the expiration of a "claims-made" liability policy.
MISREPRESENTATION - When the written or oral statements of the insured or the insurance company are used misrepresenting the risk, terms, coverages, benefits, privileges or estimated future dividends of any policy.
MORAL HAZARD - This is a condition of morals or habits that increases the probability of a loss from a peril.
MORTGAGE (OR MORTGAGEE) CLAUSE - A policy covering mortgaged property stating that the loss will be paid to the mortgagee and the mortgagee's right of recovery will not be defeated and also giving the mortgagee other right and privileges.
MUTUAL INSURANCE COMPANY (INSURER) - An incorporated insurance company without incorporated capital where the policyholders elect the governing body. These policyholders are shareholders who share in the success and sometimes the failures of the company.
NAPIA - National Association of Public Insurance Adjusters.
NAIC - National Association of Insurance Commissioners. These are state insurance commissioners who are active in discussions of problems and in the formation and recommendation of uniform practices and legislation.
NAMED INSURED - Any person , firm or corporation specifically designated by name as the insured in the policy as distinguished from other persons, who though unnamed, may be protected under some circumstances in the policy. For instance, the named insured might be John Smith. The policy may also refer to members of John Smith's family while living under his roof. Under certain circumstances, all of these additional people might be covered. They would become omnibus insureds.
NAMED PERIL POLICIES - These policies specify what perils are insured against.
NATIONAL FLOOD INSURANCE PROGRAM (NFIP) - A program by the Federal government to provide flood insurance at subsidized rates.
NEGLIGENCE - The omission of the standard of care which an ordinarily careful man takes with his affairs. This lack of care is usually divided into three classes: slight, ordinary, or gross.
NEIGHBORHOOD CANVASS - Door-to-door check of the neighborhood surrounding the location or scene of an accident. Its purpose is to uncover unknown witnesses or information concerning the accident.
NET COST - Any policy dividends paid and premiums paid minus cash value as of the date the calculation was made.
NET LINE - This is the amount of liability that the insurance company is prepared to expose to loss for its own account.
NON-CONCURRENCY - A situation where many insurance policies, meant to cover the same property for the same hazards, are not identical as to the extent of coverage or the interest insured.
NON-FORFEITURE VALUES - The values in a life insurance policy that the policy owner does not forfeit even if he stops paying premiums such as, cash value, loan value, paid-up value, extended term value.
NON-PARTICIPATING - This insurance does not pay policy dividends.
NON-RESIDENT AGENT - An agent who is licensed in a state in which he does not live.