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Insurance Glossary C

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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. 

 
Carrier

The insurance company providing coverage.  

 
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. 

 
Claim

Notification to the insurance company for payment under the policy terms for a loss. 

 
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. 

 
Collision

Coverage that pays to repair damage to your insured vehicle after a collision.  

 
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 insurance

Insurance for a business.  In fact, it is one of the most important investments a business owner can make.  Commercial insurance can be instrumental in protecting a business from potential  loss caused by unforeseen and unfortunate circumstances.  

 
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. 

 
Comprehensive

Coverage for damage to an insured vehicle not involving a collision with another car (including damage from fire, explosions, earthquakes, floods and riots) and theft.  

 
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. 

 

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