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C
Cancellation; flat, pro rata, or short rate
In a flat cancellation the full premium is returned to the insured. A
pro rata cancellation means the insurer has charged for the time the
coverage was in force. Short rate cancellation entails a penalty in
excess of pro rata for early termination.
Cargo insurance
An inland marine or ocean marine policy covering cargo in the care, custody,
or control of the carrier.
Casualty insurance
The type of insurance concerned with legal liability for losses caused
by bodily injury to others or physical damage to property of others.
Certificate of insurance
A written description of insurance in effect as of the date and time
of the certificate. The certificate does not ordinarily confer any
rights on the holder, i.e., the issuing insurer does not promise to
inform the holder of change in or cancellation of coverage.
Claims-made coverage
A type of public liability insurance that responds only to claims for
injury or damage that are brought (to the insurer) during the policy
period (or during a designated extended reporting period beyond expiration).
The development was in response to "long tail" claims,
such as those related to asbestosis injury, carrying over many years
and multiple layers of coverage limits. However, most public liability
policies are written on an "occurrence" basis, covering injury
or damage occurring during the policy period even if a claim is brought
months or even years later.
Coinsurance clause
"Coinsurance" refers to the bargain between commercial property
owners and the insurance industry. The clause in property policies encourages
the property owner to gauge coverage needs by possible, not probable,
maximum loss. With $1 million at risk but a probable maximum loss of
$100,000, for example, the property owner would probably buy $100,000
insurance and bank on avoiding the larger disaster. The bargain offered
by the insurance industry is a reduced rate per $100 of coverage if the
owner agrees to buy coverage at a specified relation (80% commonly) to
value (to possible maximum loss in other words). If the insured accepts
the bargain but events prove the amount of insurance is inadequate to
the stated coinsurance percentage, the insured becomes "co-insurer" in
the same ratio as the amount of insurance bears to the amount that should
have been carried.
Collapse
A property insurance peril, subject to its own specific agreement in
commercial property policies, which otherwise insure on an open perils
basis.
Combined Single Limit (CSL)
Liability policies commonly offer separate limits that apply to bodily
injury claims for property damage. "50/100/25" is shorthand
under such a policy for $50,00 per person/$100,000 per accident for
bodily injury claims and $25,000 for property damage. A combined single
limits policy might cover for $100,000 per covered occurrence whether
bodily injury or property damage, one person or many.
Commercial General Liability (CGL)
The CGL policy is an ISO form, widely used to provide commercial enterprises
with premises and operations liability coverage, products and completed
operations insurance and personal injury coverage. Premises medical
payments coverage is often included as well.
Commercial lines
A distinction marking property and liability coverage written for business
or entrepreneurial interests as opposed to personal lines.
Commissioner of Insurance
The official in a state (or territory) responsible for administering
insurance regulation: sometimes called the Superintended of Insurance.
Compensatory damages
The award, usually monetary, that is intended to compensate the claimant
for injury sustained.
Comprehensive physical damage (automobile)
Auto insurance covering physical damage except collision.
Contractors equipment floater
Coverage designed for the special needs of contractors to insure their
machinery and other equipment.
Contractual liability
Liability that does not arise by the way of negligence but by assumption
under contract. For example, in certain leases, a tenant may assume
a landlord’s liability to others unsafe conditions on the premises.
Some such assumptions are covered automatically under the Commercial
General Liability form.
Contributory negligence
A defense to a negligence action in which it is asserted that the claimant
failed to meet the standard required for his or her own protection,
and that the failure contributed to the loss.
Covered loss
An accident, including accidental damage by forces of nature, that brings
a contract of insurance into play.
Credit card forgery
A criminal act involving the illegitimate of credit cards to obtain goods
or money. Limited coverage for such losses is automatically provided
in most homeowners policies.
Crop Insurance
Insurance covering growing crops against hail, wind, and fire. Protection
against a broader range of perils can often be arranged as well.
Claim
A demand to recover under an insurance policy for loss. In Commercial
General Liability insurance, a policy for loss. In Commercial Liability
insurance, the claim may be against the insured by a third party under
the insurance policy held by the insured. In this case, claims are
referred to the insurer to handle on behalf of the insured in accordance
with the term of the policy.
Claims-Made Policy
In Commercial General Liability insurance, a policy that pays for events
occurring during a specified period and for which a claim is made during
the policy period, subject to stipulated limitations and extensions.
Commercial General Liability Insurance
A line of insurance available to commercial organizations and providing
coverage on behalf of insureds for sums they may be legally required
to pay to others as a result of the insureds’ actions or negligence.
May include coverage for bodily injury, property damage, personal injury,
advertising injury, medical payments, and certain supplemental payments
specified in the policy.
Commercial Package Policy (CPP)
The Insurance Services Office (ISO) commercial lines policy that contains
two or more lines of insurance or two or more coverage parts. It will
include some forms and/or endorsements that are common to all lines
of insurance or coverage parts, as well as the individual forms and
endorsements required for the individual coverages selected. In order
to quality as a CPP, the policy must include two or more of these coverage
parts: Commercial General Liability, various other liability coverage
parts, Commercial Property, Commercial Crime, Commercial Inland Marine,
Boiler and Machinery, Farm or Commercial Auto. Individual insurers
may have similar commercial packages with different requirements.
Contract
A legal agreement between two or more parties. An insurance policy is
a contract.
Coverage
In insurance, the guarantee to pay for specific losses as provided under
the terms of the policy. Coverage means the same as protection and
is often used synonymously with the word "insurance."