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Glossary of Insurance Terms
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- Barratry of the Master: An action
of the master of a ship which violates the
trust given to him, provided such action is
not taken in connivance with the ship owner.
Hazard covered in the
marine cargo policy.
- Basis: An amount attributed to an
asset for income tax purposes; used to
determine gain or loss on sale or transfer;
used to determine the value of a gift (except
donations to charities, which generally are
recorded at the current value of the asset at
the time the gift is made).
- Beneficiary: The person or entity
designated or provided for by an insurance
policy's terms to receive any benefits
provided by the policy or plan upon the death
of the insured.
- Benefit Period: A period of time,
typically one to three years, during which
major medical benefits are paid after the
deductible is satisfied. When the benefit
period ends, the insured must then satisfy a
new deductible in order to establish a new
benefit period.
- Benefits: The amount payable by the
insurance company to a claimant, assignee or
beneficiary under each coverage.
- Binder: A written or oral contract
issued temporarily to place insurance in force
when it is not possible to issue a new policy
or endorse the existing policy immediately. A
binder is subject to receipt of the premium
and all the terms of the policy to be issued.
It is a legal agreement that serves to effect
insurance coverage for a specified period of
time until the actual insurance policy can be
issued.
- Binding Receipt: A receipt given
for a premium payment accompanying the
application for insurance. If the policy is
approved, this binds the company to make the
policy effective from the date of the receipt.
- Blackout Period: The period during
which Social Security benefits are not paid to
a surviving spouse--between the time the
youngest child reaches age sixteen and the
widow's sixtieth birthday.
- Blanket insurance: A policy
designed to provide coverage under a single
limit for two or more items (e.g., building
and/or contents), two or more locations, or a
combination of items and/or locations
- Blanket Contract: A contract of
health insurance affording benefits, such as
accidental death and dismemberment, for all of
a class of persons not individually
identified. It is used for such groups as
athletic teams, campers, travel policy for
employees, etc.
- Blanket Medical Expense: A
provision which entitles the insured person to
collect up to a maximum established in the
policy for all hospital and medical expenses
incurred, without any limitations on
individual types of medical expenses.
- Block Policy: A form of
inland marine insurance designed to cover
loss to the property of a merchant,
wholesaler, or manufacturer including:
property of others in the insured's care,
custody, or control, property on consignment
and property sold but not delivered. Common
block policies are
jeweler's block and furrier's block
policies.
- Blue Cross: An independent,
nonprofit membership corporation providing
protection on a service basis against the cost
of hospital care in a limited geographical
area.
- Blue Shield: An independent,
non-profit membership corporation providing
protection on a service basis against the cost
of surgical and medical care in a limited
geographical area.
- Boat Owners Package Policy: A
special package policy for boat owners that
combines physical damage insurance, medical
expense insurance, liability insurance, and
other coverages in one contract.
- Boiler and Machinery Insurance:
Coverage for loss arising out of the operation
of pressure, mechanical, and electrical
equipment. It covers loss of the boiler and
machinery itself, damage to other property,
and business interruption losses.
- Bond: (1)A certificate issued by a
government or corporation as evidence of a
debt. The issuer of the bond promises to pay
the bondholder a specified amount of interest
for a specified period and to repay the loan
on the expiration (maturity) date. (2) A
certificate or policy issued by an insurance
company guaranteeing
performance,
fidelity or
surety.
- Book of Business: the number, size
and type of accounts (policyholders) that an
agent services, and upon which he earns
commissions.
- Branch Office System: Type of
marketing system under which branch offices
are established in various areas. Salaried
branch managers, who are employees of the
company, are responsible for hiring and
training new agents.
- Break in Service: A calendar year,
plan year or other consecutive 12-month period
designated by the plan during which a plan
participant does not complete more than 500
hours of service.
- Broad Form Property Coverage including
Completed Operations: A coverage extension
that is of great value to the general
contractor as respects "completed operations"
property damage liability claims. Without it,
the normal Comprehensive General Liability
policy will not respond for "completed
operations" claims (i.e., claims rising out of
work performed on behalf of the insured
by subcontractors). With this coverage
extension, this exposure is covered.
Additional broadening coverage features are
also included, but none as important as the
above to the general contractor. See also:
Dwelling Property;
Homeowners Policy.
- Broadcasters Liability Insurance:
The legal liabilities of a broadcaster are
numerous and vary from the use of incorrect
news stories, libel and slander, invasion of
privacy, copyright infringement, and
unauthorized use of plot, characters, or
music. Broadcasters' Liability insurance
covers these exposures, as well as defense
costs in contesting suits or claims. Employees
are covered as insureds while acting within
the scope of their duties as such.
- Broadened Named Insured: regarding
liability coverages, these coverages will
automatically apply to ". . . any affiliated,
associated, allied or subsidiary company or
entity (including subsidiaries thereof), now
held or hereinafter acquired or constituted .
. ."
- Broker: A marketing specialist who
represents buyers of property and liability
insurance and who deals with either agents or
companies in arranging for the coverage
required by the customer.
- Builders Risk Insurance:
Indemnifies for loss of or damage to a
building under construction. Insurance is
normally written for a specified amount on the
building and applies only in the course of
construction. Coverage customarily includes
fire and extended coverage and vandalism and
malicious mischief. Builders risk coverage can
be extended to a "special" form as well. The
builders risk policy also may include coverage
for items in transit to the construction site
(up to a certain percentage of value) and
items stored at the site.
- Burglary: Breaking and entering
into another person's property with felonious
intent.
- Burglary and Theft Insurance:
Coverage against property losses due to
burglary, robbery, or larceny.
- Business Insurance: A policy which
primarily provides coverage of benefits to a
business as contrasted to an individual. It is
issued to indemnify a business for the loss of
services of a key employee or a partner who
becomes disabled.
- Business Interruption Insurance:
Coverage designed to provide protection for a
business owner against losses resulting from a
temporary shutdown because of fire or other
insured peril. The insurance provides
reimbursement for lost net profits and
necessary continuing expenses. This form of
insurance provides loss of income coverage
(i.e.,
disability income) for your business by
replacing your operating income during the
period when damage to the premises or other
property prevents income from being earned.
- Business Life Insurance: Life
insurance purchased by a business enterprise
on the life of a member of the firm. It is
often bought by partnerships to protect the
surviving partners against loss caused by the
death of a partner, or by a corporation to
reimburse it for loss caused by the death of a
key employee.
- Buy-Sell Agreement: An agreement
made by the owners of a business to purchase
the share of a disabled or deceased owner. The
value of each owner's share of the business
and the exact terms of the buying-and-selling
process are established before death or the
beginning of disability.
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