P
Package policy
- Any combination of insuring agreements that combines property and
casualty coverages. Homeowners, businessowners, and garage policies
are examples.
Paid
losses - The losses that have been paid for a claim.
Pair
and set clause - Clause that stipulates that partial loss to a pair
or set of items will be valued in terms of the lost item, not on the
basis of reduced value of the pair or set.
Partial
loss - A property loss that is less than a total loss. See Constructive
total loss.
Partnership
- A business model in which two or more individuals join together to
conduct business and share profit and losses. Commercial insurance policies
usually differentiate in the "Who Is Insured" section between
corporations, partnerships, and other business models. Therefore, the
type of model being insured is important.
Pay-at-the-pump
- A device for making sure all motorists are insured; the theory being
that premiums for basic liability coverage could be collected through
"taxes" at the gasoline pump in a relatively painless manner,
thus eliminating the uninsured motorist.
Payment
bond - Sometimes also called a "labor and materials bond,"
this bond guarantees that bills owed by the contractor will be paid
as they come due. The agreement may be incorporated into the performance
bond.
PD
- A shorthand expression for "property damage."
Peak
season endorsement - Instead of buying insurance amounts reflecting
values at the height of inventory, some enterprises are able to forecast
times when values will be at their peak and use this endorsement to
increase the amount of insurance during that specific interval.
"Pen,"
The, see Managing General Agent (MGA).
Per
occurrence/per loss excess reinsurance treaty - An agreement under
which losses above a certain dollar amount are ceded to the reinsurer,
who is responsible for all losses from any one exposure above this amount
up to the reinsurance limit. The retention is expressed as an amount
incurred per occurrence. An occurrence may be one hurricane, one flood,
or one accident that results in injuries to multiple people.
Per
risk excess reinsurance treaty - Similar to a per occurrence/per
loss excess treaty except in the matter of the retention. The retention
applies separately to each subject of insurance.
Performance
bond - A bond that guarantees the property owner (the "obligee")
that the contractor with the winning bid on a job will perform as promised
and on time.
Peril
- A potential cause of loss.
Perils
of the sea - Somewhat akin to open perils on land, the term refers
to any potential cause of loss derived from shipment on a seagoing vessel.
Period
of restoration - The period of time following a loss that is necessary
to restore a business or organization to a pre-loss condition.
Personal
articles floater - Before the advent of packaged forms and broad
coverages, households commonly had fire insurance on dwelling and personal
property with the possible addition of extended coverage. The personal
articles floater is an inland marine form that was used by the affluent
for scheduling open perils coverage for various articles and classes
of valuable personal property. A homeowners endorsement accomplishes
the same thing today and the personal articles floater is no longer
widely written.
Personal
auto policy - The form currently promulgated by Insurance Services
Office (ISO) for coverage of personal auto liability and physical damage
exposures.
Personal
injury - Distinguished from "bodily injury," this term
relates to injury inflicted by way of false arrest, invasion of privacy,
malicious prosecution, and so on. It is written as Coverage B of the
commercial general liability forms and as homeowners Coverage E.
Personal
Injury Protection (PIP) - The section of an auto policy in a no-fault
state that responds to physical injury, loss of income, etc., of the
insured regardless of fault.
Personal
liability insurance - Insurance for individuals or members of a
household offering protection against claims by third parties (outsiders)
alleging bodily injury or property damage due to negligence. See also
Premises medical payments.
Personal
lines - Insurance covering the liability and property damage exposures
of private individuals and their households. Contrast with Commercial
lines.
Personal
property - Term used in insurance to distinguish chattels from real
property.
Physical
Hazard - A hazard that arises from the material, structural, or
operational features of the risk itself apart from the persons owning
or managing it.
Physicians
and surgeons professional liability insurance, see Professional
liability.
Plate
glass coverage - Provides "special" protection, except
for the perils of war, nuclear reaction, and fire. (Fire is covered
under the building policy.) This coverage is for full replacement cost
and covers the expense of repairing frames, installing temporary plates,
or boarding up openings.
Policy
year - Unique to the insurance business, this is a means of cost
accumulation in which the aggregate transactions of all policies becoming
effective in a given year determine the financial performance of those
policies. Policyholder, see Insured.
Policyholders’
surplus - The amount of money available to an insurer to meet its
obligations to its policyholders, after subtracting liabilities.
Pollution
liability insurance - Coverage for bodily injury or property damage
caused by a "pollution incident." Insurance Services Office
has two forms, one limited to on-site clean up of pollution spills.
Pool
- An organization in which insurers cover certain types of risks as
a group and share premiums, expenses and losses. Pools are often used
to underwrite larger risks.
Portfolio
- All of an insurer’s in-force policies and outstanding losses, respecting
described segments of its business.
Power-of-attorney
- Commonly used in bonding, this document conveys authority for the
individual(s) named on it to execute bonds and other legal documents.
Premises
- Generally, a piece of land with a building or buildings upon it.
Premises
and operations liability - Once known as owners, landlords, and
tenants legal liability, or as manufacturers and contractors liability,
depending on the business’s activity, the term refers to the liability
exposure of business entities to third parties (customers, guests, and
passers by) who may become injured or have property damaged through
the negligent acts of the business persons, their agents, or employees.
Coverage of this exposure is by way of the commercial general liability
policy. Contrast with Products and completed operations liability.
Premises
and operations medical payments - Bodily injury rather than liability
is the trigger for this coverage. Sometimes referred to as "customer
good will insurance," it is a relatively inexpensive addition to
the commercial general liability policy and an automatic feature of
personal liability protection. Since it responds to injury of customers
or guests without regard to fault, it is sometimes effective in heading
off a potentially much more serious liability claim against the owner
or tenant of the business premises or private residence.
Premium
- Term for the amount of money the insured pays the insurer to purchase
insurance.
Pressure
vessel - In boiler and machinery insurance, a type of container
designed to hold liquids or gasses under pressure. Types are categorized
as fired (such as a boiler) and unfired (such as an oxygen or hydrogen
tank).
Price-Anderson
Act of 1957 - Federal law that requires evidence of financial responsibility
for all privately owned nuclear reactors, spent fuel reprocessing plants,
and for fuel fabrication plants licensed to process five or more kilograms
of plutonium.
Primary
insurance - The first policy or coverage to apply. Contrast with
Excess insurance.
Principal
- Used in suretyship, it refers to the individual whose performance
is guaranteed.
Prior
Approval - Indicates that an insurer must have rate or form changes
formally approved by the state insurance department before it can use
them Private Passenger Automobile - A four wheeled motor vehicle, subject
to state registration laws, designed to carry passengers (such as a
car, station wagon, SUV, or van) on public roads.
Pro
rata cancellation, see Cancellation.
Producer
- A term identifying the insurance agent, field rep, or other employee
who sells insurance.
Product
recall insurance - Coverage for the costs of recalling a product
known, or suspected to be, defective.
Products
and completed operations liability - The liability exposure of the
manufacturer whose malfunctioning products may cause injury or property
damage or of the contractor whose failed structures or projects may
do the same. Coverage of the exposure is a feature of the commercial
general liability policy. The insurance does not in any way constitute
a guarantee of either the insured’s product or work. Contrast with Premesis
and operations liability.
Professional
Insurance Agents (PIA) - Trade association of insurance agents.
Professional
liability - A form of errors and omissions insurance, (sometimes
called "malpractice" coverage for errors alleged against those
in the healing and legal professions). Arbitrarily it seems, "errors
and omissions" is the term applied most often to insurance covering
liability for mistakes in matters affecting property, i.e., coverage
for "Insurance Agents E&O," "Architects E&O"
while "professional liability" is used in reference to coverages
such as "Druggists Professional Liability," "Physicians
and Surgeons Professional Liability," and "Lawyers Professional
Liability."
Promulgate
- To develop, file, publish, and put into effect insurance rates or
forms. Proof of loss - Following a loss, a formal statement given by
an insured to the insurer that includes details of the loss such as
the original cost of damaged or destroyed property.
Pro-rata
or proportional reinsurance - A certain portion of every risk is
ceded under a proportional agreement. The insurer and reinsurer agree
to share a portion of all insurance, premium, and losses in the same
amount. The insurer is paid a commission for ceding the risk portion
and premium to the reinsurer.
Prospect
- A potential buyer of an insurance policy or program.
Protection
and Indemnity (P&I) insurance - The nautical equivalent of bodily
injury and property damage liability.
Proximate
cause - That event which, in an unbroken sequence, results in direct
physical loss under an insurance policy. For example, wind is the proximate
cause of loss when a windstorm blows out a window that in turn topples
a lit candle that sets fire to a structure and burns it down.
Public
adjuster - An individual or member of a firm who contracts with
private parties to aid with the preparation of loss statements and presentation
to insurers. Contrast with Independent adjuster.
Public
liability insurance - General term for any liability coverage for
claims brought against the insured by a third party or member of the
public.
Public
official bond - A "performance bond" for holders of public
office.
Punitive
damages - An award for damages above and beyond the requirements
for compensating third parties for injury or damage. As the word implies
the award is meant to punish the offender. Most states and territories
permit punitive damages awards to be covered by liability insurance.
Pure
risk - The only consideration is the possibility of loss or no loss,
but not making a profit. Contrast with Speculative risk.
Q
Quota
share reinsurance
- A type of pro-rata or proportional reinsurance agreement under which
the insurer and reinsurer agree to share a pre-determined portion of
all insurance, premium, and losses. The primary insurer’s retention
in a quota share agreement is expressed as a percentage of the amount
insured.
